All Forum Posts by: Andrew Taylor

Frankly I'd rather not sell the note, though. The balloon payment is due in just a few months, so I'll either collect the full balance due, or I'll extend the loan at more favorable terms. I'd really rather just tap some of the equity to use elsewhere in the meantime.

We financed $185k for them after about a $60k down payment. I think the terms were 6% at 30 years, eleven monthly payments of $1109 plus a balloon of $175.8k due in April 2019. Buyer makes electronic payments on or before the due date every month so far. 

Been kicking the tires around BP for a few years now, but to-date I've done nothing but analyze properties and try to educate myself via BP, books, podcasts and meetups. I think I've finally had enough of "paralysis by analysis," and I'm ready to put my money where my mouth is.

Problem is, like so many others, my family and I live right at the edge of our means (that's a whole other discussion) and consequently, I find it hard to squirrel away enough cash to provide a useable investment kitty. We're in the process of rolling my wife's small 401k over to a self-directed IRA, and we're owed another $10k or so that I could see in the 1st quarter of 2019 if I'm lucky.

However, we do hold one significant - if non-liquid - asset: we sold a piece of property to a young couple earlier this year and we're owner-financing it for them. We currently receive about $1,100/mo in net cashflow from that deal, which is awesome. There's a balloon payment due in April of 2019 of about $180k, although I'm guessing they'll want to refinance/extend the note for another year.

My question is, what's the best way to leverage that note so I can start investing now? I've reached out to a lender about "hypothecation" (borrowing against the note), which is apparently a thing. I think I can borrow against my interest in the note, and then use that money to purchase a rental or a flip to get my snowball rolling.

Curious to hear your thoughts on this idea and/or any other options for leveraging the note we hold. Thanks in advance for your input.

@Saj Johnson I'm a long-time Houston-area contractor looking to move into MF and property management. PM me and maybe we can help each other out. 

I'm a local GC :). But I've spent 20 years doing single-family residential, not light commercial. That's why I was looking for a ballpark.

What is the ballpark cost to build a multistorey building (say 3-5 floors) vs. a single story building? Been considering building a group of 4bed/4bath detached units for student housing, but I'm wondering about the feasibility of building larger units instead. Obviously there's less slab and roof, but I'm unfamiliar with this type of construction and unsure of costs beyond that. Just looking for a general idea so I'll know whether the option is worth considering.

Thanks @Jeffrey Stasz. Number 4, "Lease up and sell phase 1 cash flow or convert that phase 1 debt to a long term loan and retire the previous debt," is specifically what I'm looking for more information on. I am assuming that I can't lease the initial units in August for the fall school term, then walk into a bank in September and say, "Look, we're at 100% occupancy and cash flowing, please convert my short-term debt into a long-term loan, and also I need more money for phase 2."

I'm considering a new student housing development at a nearby university with a chronic shortage of student housing. I'm curious about financing the project - specifically, how would I convert it from what I assume would be a hard-money / private-money / short-term loan from a friend / family member into a long-term permanent financing type deal? 

I'm thinking I need $1M to build out phase 1 of the project (purchase land, complete horizontal construction, and lease up the units). Once they're all leased up and the property is operating at a profit, I'd go to a bank and say, "Look, it's a viable concept, we completed phase 1 without screwing anything up, units are all leased and generating profits, and we have a waiting list for phase 2 and 3 units. Please loan me the money for phase 2 (or phase 2 and 3)."

Assuming I have to borrow the $1M from HM/PM/FF, what do the terms look like? Obviously I don't want to pay 12-14% for years, but I figure I'm going to have to pay an elevated interest rate for a while. How long until a conventional lender will loan against the project and allow me to continue with phases 2 and 3?

Anybody who wants a property with a barn wants power in the barn. I'd leave it as-is and let the buyer repair it, or have it repaired yourself if it's in the budget.

I stand to collect a significant windfall in early 2019, and I am contemplating how best to put the money to work. I like the idea of short-term rentals, and I am wondering if I would be better off buying several smaller, less expensive units, or one larger, nicer unit. Those of you with experience in the Airbnb Marketplace, what are your thoughts? Would three or four two-bedroom units be a better or worse idea than one 4-5 bedroom unit? If it matters, the market area would be Freeport or Galveston, Texas.