All Forum Posts by: Andy Chu

Typically if no one bids on the property, they will initiate a price reduction on it. And then they will accept a % of list price. 

Asset Based Lender is another word for Hard Money Lender. Those are usually last resort lenders and typically have points up front and rates in the double digits with a balloon payment. If there is enough margin in the deal, then I would say go for it, but this is definitely one of the last resorts. 

It really depends on price point. For a 20K property, it wouldn't even be worth it. For a 500,000 property, Im sure they can go up to 85% because the numbers are bigger.

Thank you for the quick response. The lot is currently zoned C-1 so I think we should be fine. 

I love the idea of calling the malls, but trying to figure out a % of sales in a cash business seems to be a losing proposition. However,  contacting the local farmers for additional revenue is a great idea! 

I got an unsolicited offer to rent out a piece of land we own to a Christmas Tree business. Has anyone else ever dealt with one of these offers? What's a fair price for an acre, or would it be greedy to put together a percentage of sales. 

The appraisal on 4 plexes or less are all used based on Sales Comparables and Never on Income approach. With that said, they need to at least find like kinds. 

You will need to get a rebuttal form from the lender to see if you can provide additional SOLD comps that help justify your number. 

A 10 unit apartment complex with a lease option screams disaster for the Vegas market. Keep in mind that we do not have too many units built after the 1960s and usually all in rough areas. However, let's say you do find the property. A lease option by definition means you are going to pay market rent + option money. Which means that even if you get all units rented out, you will still be bleeding cash. 

@Jesse Tsai

the answer is not following a percentage or a rule but understanding what it yields. Let's say it costs 145,000 for acquisition and $2900 for closing costs.

Make the the hard money lender doesn't have any points up fronts.

245,000 sales price

-145,000 purchase price

-2900 closing cost from acquisition

-25,000 repairs (get bids)

-14,700 realtor disposition fee

- 4,900 closing cost from disposition

-20,300 interest payment for 1 year

-3,000 misc utilities, insurance, pad, etc

--------------------------------------------------

29,200 net profit if all goes right .

If seller is not wanting to sell for so little, the you may decide to work for cheaper, but either way, this gives u a basic idea of your numbers.

@David W. Vegas returns are oftentimes falling below the 5% returns (2 months vacancy, less taxes, less insurance, less HOAs, less anticipated repairs, cash on cash).

Also in Vegas, you can find higher returns of 10%+ but you better be carrying. It all depends on the goal and the portfolio you are trying to structure.