All Forum Posts by: AJ Leman

Hi Sharon,

My brother is an investor and a realtor in Champaign. I was born and raised there but have lived in Iowa for about 2 decades. His number is 2177785320.
Good luck!

AJ

Hey Cory,

We have had good luck in Danville. Reach out to my brother, J Leman. He is a realtor and investor.  His number is: 2177785320

good luck!
-AJ 

Hi Sharon,

Welcome to BP! I live and work in IC.  We have various types of rentals and flip the occasional house as well.  I don't have a lot of refferals for you, although we use Hills Bank for all our financing and they are great.  Best of luck on your journey and let me know if I can help!

AJ

Hi @Katelyn Latour and welcome to BP.

I would say maybe.  Your best bet would be to talk to a local bank.  I've found that the local banks are usually more flexible when it comes to being creative. You could also try to buy 1 property and then buy the other two with seller financing if they are open to that.  

Best of luck-

AJ

Some seller will finance the whole thing, just depends.  We did all seller finance on our 18 unit.  The only drawback of all seller finance is the seller may want a full down payment to protect their interests.  So, on the 18 unit, we had to come up with a 250k DP.  Then the seller carried a 1M loan for us.  In the other deals, we did no money down becasue the bank holding the majority of the note - not the seller.

Hey @Michael Fitts,

We've done three seller financed deals:

1. 460k for an 11 unit.  Bank loan of 368k. Seller carry of 92k at 6% on a 5/25 note. We paid no money down, which was nice.  But our cashflow is tight because of this.

2. 1.25M for an 18 unit. Down payment of 250k, seller loan of 1M at 5.5% on a 5/25 note.  We asked for interest only for the 1st year, but the seller did not agree to that. He wanted to make sure we had skin in the game. 

3. 730k for a 27 unit mobile home park. Bank loan for 530k. Seller carry of 200k. Again, no downpayment, which makes cashflow tight.  

In all of these cases, we pitched the idea of seller financing as a way for the seller to earn more money by being the bank.  Case in point: the 18 unit seller wanted a price of 1.6M.  We settled on 1.25M, but the seller will get close to 1.55M after 5 years of interest payments from us.  

Best-

AJ

Ok, so here is a quick analysis:

Price: 71k
Down Payment: 14k

Mortgage: $450/month
Insurance: $50/month
Taxes: $50/month
Repairs: $50/month
CapEx: $100/month
Utlitlies: $100/month
Management: ?
TOTAL Exp: $800+
Rents: $1050/month

Cashflow: $250 or so.

Other factors: neighborhood, appreciation, tenant base, etc.

Seems like it could be a good deal. CapEx could be more depending on the age of home. For Example, a new roof would cost you several thousand at least!

Hi @Antonie E Fields!

Need to see some numbers: Price, rental potential, and expenses.  That will give us something to go off!

Best-

AJ

The rates will eventually go back down, but they also keep building nice, new buildings, so I'm not sure when. There are niches that aren't as effected, but I would exercise caution in the predominantly undergrad areas.

From what I hear, crime may have ticked up a bit, but its all about which neighborhood you are in. From what I have seen, most of the 2% rule homes won't be in great neighborhoods, so you'll have to weigh that.

We primarily invest in surounding towns becasue the purchase prices are much lower, but the cash flow is still decent.

Hey @Joshua Haynes, welcome to BP! I was born and raised in Champaign.  My family still lives there and we invest in the area. Like all midwestern college towns, it represents a nice opportunity.  One thing to think about is that campustown is getting overbuilt.  The market will correct itself, but it may be rough sailing (for a bit) for the big outfits.  Here is an article from the local paper:
https://www.news-gazette.com/news/local/housing/tom-kacich-apartment-landlords-call-for-lower-tax-assessments-amid/article_b8b70990-e3b7-5f57-bd2b-a9a0689150a5.html

My business partner and brother, J Leman, is a realtor and investor in Champaign. He could give you a good read on the market if you'd like. Best of luck on your jouney!

AJ