I met a lady and her son that own roughly 11 properties throughout the city approximately 40+ units in their total portfolio. They've managed these properties for some years now and are looking to sell them all and retire in the near future. Some of these properties are transitional housing that they are in the process of converting over to "regular" housing. Me and my fiancee just bought a four unit property 6 months ago, but obviously want more properties in the future and this seems like the perfect opportunity to capitalize on. We mentioned speaking with her and discuss her possibly selling us her portfolio at some point, some how. She said we can discuss it as long as its done the right way using attorneys. She was very nice and offered to give advice and connect us with people to help us with our property. Now being we've just purchased our first property and don't have much capital (especially to purchase this potential portfolio) we are not sure how to seal this deal, such as financing options etc. Ive read about different financing options such as seller financing but are clueless. I know not having any financials doesn't benefit much, but i wanted to get a jumpstart with some ideas how to approach this before our meeting...Any advice?? much is needed
@Remone Randolph Hey Remone, looks like you scored big and you're 100% right by saying that you should capitalize on it, especially if you'd be getting the properties at a huge discount. What you have to try and find out, is exact details for every single building that she has. From there, determine a price that would make sense to purchase one at a time and factor in a discount because you'd buy all the properties over a period of time. With that being said, try to talk to seller and ask if she would be willing to sell the properties over a period of time. How you structure the deal all depends on you and the seller, you can even ask to manage the properties for her if she wants to retire and collect a portion of the profits (fee) until you have the capital or the lending power to purchase the property out right. The GOAL is to figure out a structure where they don't have to work and still make money. They want to retire but I am sure they are not in a desperate need of money right away, so just structure a way where you make money and over a period of 2-5 years you buy out their total portfolio. Because at the end of the day, if the deal makes sense finding money to close the deal won't be hard, because there are tons of people that want to do nothing and make money on their money from lending to you.
Great advice @Mateusz Prawdzik managing the portfolio for them until you have the finances would be a win win, it would eliminate their responsibility to be hands on, while also still making them income. Your attorney would be able to draft the proper documentation so all the details are covered. I think it's also very wise to run the numbers on each property to ensure this really is a home run deal. You would have to upgrade to pro @Remone Randolph to run every property but it would be worth it.
@Mateusz Prawdzik your right i don't believe they're hard up for money but she did mention she's getting older and has done all the paperwork for the properties and her son oversees them so looking to 'Fold' and get out. So i intend to find out as much info as possible and come back with more info for more advice. The mgmt i don't think they have a need for (not sure) but i did offer to help them with any work on the properties, which i thought would be a good way to find out how these properties really are. Working full-time it'll be tough but i gotta do it.
@Remone Randolph Like I mentioned before, if people can not work and make money, they will do so. You are going to have to be the pawn and do everything and make it work. Even if you don't sleep for weeks or months, you will have to work but it will be worth it down the line. You have to figure out a way and structure a way where they are willing to slowly sell their property one by one to you as you manage it and make money on it as well. It's all about how you sell the structure, it's all about SELLING. Make sure you make it sound like its a good deal for them (which it is), but make sure that you have to eat too and you want something in return for being the pawn. If they are reasonable people and they want out, they will understand.
yea @Mario Bellaria @Mateusz Prawdzik that is a great idea as i sit here and ponder on it. Maybe they can pay me a couple hundred a month, but i can gain that experience and get first hand experience. I love BP! such great advice
@Remone Randolph And it's all free, connect with me and PM me for any more questions. I will tell you everything and anything that I know. I love watching people grow because it helps me and my company grow. I would love your support.
@Mateusz Prawdzik yea your right i need to tap into my negotiator side and make this deal happen. I don't sleep much anyway
@Mateusz Prawdzik definitely! much appreciated
@Remone Randolph I'm a property manager full time for a large company. I manage a 402 unit property and I'm listening to the audio book set for life, an amazing book of wisdom. I'm using my knowledge I'm gaining at work as a side hustle now. I'm targeting wealthy people I know and asking them if they are interested in investing in real estate, I can manage their investment. I have one property so far, I charge $125 a month which covers phone calls, maintenance calls, etc. I can't fix everything but I'm the point of contact the tenant calls and I coordinate the plumber, electrician, etc. It's easy money if they are good tenants. I don't have a real estate license but I charge the owner $500 if I have to show the property, find a tenant, and generate a lease, etc. Good luck to you! I find the webinars, podcasts, and books by the BP team are incredible resources for growing your education in this industry and I truly feel this website will help me to achieve financial freedom.
wow mario your definitely in a great position managing that many units. I was going to ask how much is a reasonable fee to charge to manage the properties. $125 a month seems good and 5 of their properties i know about are all within a mile of my current property which is nice. I tried to go buy set for life at a few book stores but it was sold out smh. So amazon prime it is. Thanks for the advice I'd love to connect with you
@Mario Bellavia Let's also connect. As I am trying to get my name out there and brand my company, I have been starting to do that as well to establish stronger business relationships. I am doing the same thing you do full time except I manage the projects that newbies have and don't know how to do in order to gain reputation and grow my business following. I still do my own projects and flips, but I pick up other peoples projects, don't charge anything throughout the process, but take a portion of the equity at the end, so I am not a GC where I take right off the top of every sub. The portion at the equity doesn't put me in any risk financially but it puts my time on the line, and my time(6 months) is worth more than most things in the world. I hope that in doing this on the side while I do my own projects, I can grow good business relationships that will open more doors for me down the line. Let's connect and talk.
@Remone Randolph the audio book is amazing, I have add and can't focus on reading so I listen to the audio in the car or before bed. Full time private property management isn't something I think will make me rich, I think there are a lot of headaches and it isn't worth it, but in your case I think if it will help acquire the portfolio it's worth it. My goal is to build my own portfolio and retire. After googling and searching I came up with $125 as a decent price to manage his rentals, he actually has a house with 2 rentals, his practice, and 2 other doctors. I also do landscaping too and cut his lawn for $50, a true hustler. I plan to work as hard as I can in my younger days to ensure when I have kids I can give them the attention they deserve. My parents both provided me with an amazing life, but they traded their time for dollars at the Post Office until they could retire. @Mateusz Prawdzik sounds like your on the right track and success will be yours in time.
@Mario Bellaria hey sometimes i feel like i have add seriously my mind is everywhere. my fiancee has tried to get me to do the audio books as i prefer the hardcover but maybe ill go outside my comfort zone for once. your definitely ahead of the game managing those properties as you never know if they will decide to sell to you and BOOM theres go your portfolio in one swoop. True hustler you are, shows you will never be broke always looking for that extra dollar! keep it up
@Remone Randolph my wife trys to sneak her ADD medication into my breakfast when she wants me to help clean the house lol.
Keep us updated on the outcome of this transaction, I would love to hear what happens.
@Mario Bellaria lmao! thats funny..well if your as persistent as her you will do great in Real Estate;)
I will definitely post updates soon.