Advice on 222unit Auction for 1st deal

3 Replies

Hey Everyone! Check out my profile if you would like to know more about me otherwise I'll get straight to the point!

I currently noticed that a 222 unit complex is going up for auction soon in April. This is in West Lafayette, Indiana very close to Purdue University! I have all the data an investor could ever dream about but I do not have all of the money an investor could ever dream about. There happens to be a $50,000 refundable deposit just so I could place a bid. Bidding starts at $8,000,000 and will have a 5% transaction fee on the final bid price if won. The market is great and I have lived in West Lafayette for two years since I do go to Purdue. This is just NOT something I want to pass up but I do know it will be highly unlikely for me to get a bank loan in time for the bidding process. What advice would you give me for searching for hard/private money lenders that can help with deposit and would want to become partners in this deal? What would make this deal interesting to those people? I can share more information if needed. Note, I have to obtain this money in several weeks.

My offering is to provide completely passive income to my partners as I would do ALL of the work (given there is already a property management company which can be replaced of course if needed). There would also be a lien on the property so there would be complete security.

I appreciate lofty goals and aspiration, but with all due respect nobody is going to loan ~$8M to a 20 year old with no track record. Start smaller and work up, otherwise find a partner who has access to capital.

@Aaron Van Curen  I would say its a bad idea especially for a new investor. 

I would add through, years back, i found a multi fam complex that was going for auction. I was able to find a lender that would fund it as we did preliminary underwriting, and I had to pay the point up front to get them on board regardless of if I got the deal or not. That in itself was not the issue but the pricing on the auction went higher than I feel comfortable but I would have come out well today if I bought it since that market did so well but at the time I was good with the decision I made.

Hi Aaron,

I like your enthusiasm! 

I think you are going to be great at this because you are a possibility thinker!

Yes you need to get some knowledge and experience under your belt, but you already have the "it"

factor!
I do have a question, what condition are these apartments in?

Have you walked the property? 

I need boots on the ground from time to time. Are you open to working together once in a while?

Take care,

Lori