Owner Finaced My First MF! STOKED

9 Replies

Hey all!

Today was an exciting day as I have my first Multi-Family deal in the bag pending a good roof cert we are on to closing. I secured the deal with owner financing @ 5% . I am beyond excited about the opportunity because I am acquiring a cash flowing property that is fairly maintenance free all brick is my favorite feature , plus, I manage properties already so we just add this one to the stack.

One tenant pays a year in advance and will put the account in great shape from the get go the other he has been there for 8 years and the apartment is in great shape. The other three units are on section 8 and have been for the past 8 years on average. All apartments are in great shape and tenants are happy, I have already been through the entire building and I am jazzed up about it. I am cash flowing with the current tenants and their current rent so I am happy, yet, when we get one turn over each unit stands a $100 - $150 increase... 


In the words of the late great Bart Scott former New York Jett's Linebacker "CANT WAIT!"


even though I will... As long as I am cash flowing and they keep the apartments up like that I wont change a thing. 

 

Best part, the negotiations on the owner finance have developed into a relationship where further investing is on the horizon. Fantastic! Especially after my meeting today with a commercial lender and hearing that they want more proof of income. 

Beings it is my first taxable year as a fully independent 1099  employee "responsible adult", you know, the moment Mom and Dad prepared you for, a 46% dip in income has warranted the banks speculations. I left them a copy of my business plan and gave them a couple of days to review it, I put a few fictional deals into the plan to portray my vision; they either want to make money or someone else will. 

My current deal is going to open the door to many more, I will keep everyone posted. 

Cheers & Happy Friday

-Shane

Originally posted by @Shane Potter :

Hey all!

Today was an exciting day as I have my first Multi-Family deal in the bag pending a good roof cert we are on to closing. I secured the deal with owner financing @ 5% . I am beyond excited about the opportunity because I am acquiring a cash flowing property that is fairly maintenance free all brick is my favorite feature , plus, I manage properties already so we just add this one to the stack.

One tenant pays a year in advance and will put the account in great shape from the get go the other he has been there for 8 years and the apartment is in great shape. The other three units are on section 8 and have been for the past 8 years on average. All apartments are in great shape and tenants are happy, I have already been through the entire building and I am jazzed up about it. I am cash flowing with the current tenants and their current rent so I am happy, yet, when we get one turn over each unit stands a $100 - $150 increase... 


In the words of the late great Bart Scott former New York Jett's Linebacker "CANT WAIT!"


even though I will... As long as I am cash flowing and they keep the apartments up like that I wont change a thing. 

 

Best part, the negotiations on the owner finance have developed into a relationship where further investing is on the horizon. Fantastic! Especially after my meeting today with a commercial lender and hearing that they want more proof of income. 

Beings it is my first taxable year as a fully independent 1099  employee "responsible adult", you know, the moment Mom and Dad prepared you for, a 46% dip in income has warranted the banks speculations. I left them a copy of my business plan and gave them a couple of days to review it, I put a few fictional deals into the plan to portray my vision; they either want to make money or someone else will. 

My current deal is going to open the door to many more, I will keep everyone posted. 

Cheers & Happy Friday

-Shane

 Congrats!  

Congratulations, great outcome.

Make sure you keep the advance years rent in a separate bank account, it remains the property of the tenant until withdrawn monthly.

Congratulations! That sounds like a great deal, I hope everything pans out. Would you mind sharing some of the numbers? What are you paying for the house and what was your deposit? How did the owner financing deal come about? 

@Christian Scully most definitely. Purchased: $315,000 Down: $15,000 Rate: 5% Payment: $1,700 T&I:$350.00 Income: $2,400.00 And I am a licensed agent here in town. Only one in the office when they walked in the door they pulled up a chair and we hit it off. They were looking for a new investment and were happy at 5%. I feel super fortunate. Not only that but the moment we notorized the mortgage and signed the contract we proceeded to look at two more potential deals.
Your payment is 1700, t&I 350, and income only 2400. how are you going to make money on this deal? that only leaves 350 for utilities, vacancy, repairs, capex. I hope it works out for you, but with those numbers I think it'll be tough.
@Donald S. Tenants are responsible for utilities. I'm definitely not robbing the bank on the deal or relying on it to feed the family but to get it under my belt with potential I will take it. At first glance I'm barley afloat, maybe 100 bucks after all said and done. each unit is under valued between $100 - $150 per unit. All units have been long term and consistent, like as if the government were paying the bill. Each vacancy I have opportunity. And it was bought at value, had it hit the market the opportunity would have never been there.

@Shane Potter Seeing opportunity can be hard in a rising market.  Good job.  I hope the move to being your own boss works out well for you.  Your experience in managing properties will be invaluable.  How can you not have a W2 if you are managing 250+ units for other folks?  I have done thin deals like this in the past that you knew you could raise rents on and have instant equity.  It still takes guts to pull the trigger.  It's ok to do a few deals like this to get started or build equity, but you need cash flow deals if you want to make it long term.  Good luck, let me know if I can help.

@Jerry W.

Thanks Jerry, I will be keeping in touch on how things are going on this current deal. Positive thoughts. And to answer your question on the W2 It is within the umbrella of my brokerage and I am the only active member running the PM side of things. I know that they did not give me a W2 at the end of the year and made sure I am responsible on the tax end of things for any compensations I made through the PM side of things. 

Not sure this of any use of just mudding the waters... Learning this message board as I go.

-Shane 

@Shane Potter

Congrats Shane. I constantly hear the same thing by experienced and successful MF folks. Just get your first deal and it doesnt have to be home run. Congratulations. 

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