Posted 14 days ago 2020 Investment Goal I made a goal to close my first deal “large deal” (anything with 5-20 units) this year, yes even amidst the coronavirus! Since the beginning of the year I have been analyzing deals non-stop. Seriously, until my eyeballs want to pop out of their head from looking at a computer screen for so long. At the beginning of the year, I located a 16 unit, off-market deal where I was able to get in touch with the owner. After much talking and me convincing him to sell his property; we ended up walking all the units and started the talks towards me drafting an LOI. This was a home run deal. I had NO competition, no bidding wars, no time crunch - this deal was perfect and it was mine! It was a slow process but it was moving forward. Finally in March of 2020, I was prepared to present an LOI (Letter of Intent, to purchase). For those that do not know, this is not a contract but a non-binding agreement outlining some terms prior to an official contract to purchase being drafted. On March 6th, I sent the LOI. (Remember, this is RIGHT when covid really became a nationwide panic). For one whole week after sending my LOI, it was crickets...Finally, I hear back from the owner who told me that due to Covid, he was advised to put everything on hold. I was super bummed! After all, I just spent two months underwriting, walking all the units & the property and spending hours on end making sure I was checking all of my boxes and estimating my rehab properly. But, it fell apart before it even happened. Weeks and Months go by but I could not find another deal like the 16 unit deal. I was looking every. single. day. Approaching off-market property owners attempting to make offers, to no avail. I eventually came across a listed commercial property with 7 units. Not too far from the 16 unit building actually. This commercial property was nice, it needed a lot of work but I had vision for the building and the numbers worked. It was a significant rehab though, which was slightly frightening since it would have been the largest project I have participated in and I had zero partners, this was my deal and my deal alone. I managed to negotiate owner financing with satisfactory terms and down payment- a solid bonus. After my 30 day due diligence period and a few hiccups along the way that were eventually resolved- my deposit went hard, we were closing. It was going to cost me about 110K in cash for acquisition plus rehab, my first full year NOI would equate to 50K roughly. Not bad considering my full cash investment was only 110K and a purchase price of $350K. After building and site renovations, I was expecting a valuation somewhere in the $900K-1.2mm range. Here we are the week of closing, I am excited and slightly nervous for the project I am about to undertake... then, I receive an email from the sellers attorney that I was not going to be receiving the deposits for the tenants (this is after I received a statement of accounts and leases that showed I was owed the deposits). I was confused but thought to myself “well, this shouldn’t matter I will talk to my attorney and have her talk to his attorney and this will all get worked out, surely they will just end up paying the deposits....” Wrong. My attorney had a death in her family and was out of state with no access to email or phone, so she could not assist and her office houses no other attorneys. I was supposed to close in 4 days and the deal was crumbling right before my eyes- I was helpless with no representation! I am not an attorney so what was I supposed to say or do? Being a realtor I knew this was wrong, DEFINITELY unethical. I know other real estate attorneys, of course, but what attorney do you know (especially when so many businesses are working remote now) that can get started right away on something for you? None that I know. You can barely get a consultation in the same week you call let alone have them start working on your case. Needless to say, since I didn’t know what to do, the only thing I knew to do was cancel the contract and request my deposit back. Did I have a case? Probably. Was it going to be worth my time to go after the seller to pay me the deposits? Probably not. At the end of the day I took this as a sign that this property was not meant for me. This was the third “issue” that we ran across during the transaction and this was the last straw for me. This brings me to present day, Sept 2020. From March to September, I continued following up with my 16 unit guy. I would text and call. Sometimes I would receive a response and sometimes not. But guess what? We have started up talks again and I have sent him another LOI. Although he says he will not be ready to sell until first quarter of next year, this is definitely a positive! This will be my one of two deals for next year. This still leaves me with needing to close on 5-20 units in 2020 to achieve my goal… Although I have been disheartened somewhat with the lack of closing on one of these deals, I am persevering. I am continuing to analyze and search for deals. Currently I have a 10 unit building that is in my sight! Wish me luck on this property! I actually plan on reaching out to the owner this week and hope to send an LOI in the next 2 weeks or less and then I will have approximately 90 days to close to reach my goal.