All Forum Posts by: Arpan Patel

It's fine and can be good networking. I'd say meeting people there is much more valuable then the content or the pitch. I'd still stay but I'd switch my focus towards having good conversations with the people sitting by you and during breaks.

@John Mathewson: That's funny because I was just talking to Nick and discussing how we could work together.

Hey all,

Just wanted to share some of the accumulated good news of 2016. In 2015 we had just sold one house (July) but by the end of 2016 we had sold 6 and have another 6 currently on the books with one of them under contract while still in construction and we are launching a new market and new rental model where we are buying 5 properties a month to do the BRRRR strategy. We also picked up two people for the office; one as an onsite project management and another in a logistics and operations role. Also in that time, I left my job of three years, got a office, got a second office 3 months later, and are looking to take on three more people by the end of first quarter this year. We have also been able to raise more private money then I ever thought possible at the onset of the year and have increased our partnerships with our hard money lenders by over 26 fold. It been a good year but as we look forward, we'd like to double the amount of houses we sell and - as you can tell - really dig in on the rental model this year. How are you guys trying to scale your businesses for 2017?

Wish us luck!!

-AP

1) The usually do Interest only loans because they are short term

2) Depends on the lender. I know some that will base it off of your assets and then attach a multiplier. For instance if you are worth 1M they will have a credit line with you for 3-5M depending on experience and other factors related to your actual balance sheet. I have other lenders who have a hard cap. No matter how much you are worth or you experience, they only want to lend you 1.5M

3) The number also depends on the borrower. I haven't seen a limit after the relationship is built but in the beginning 1-3 at one time is typical.

4) They all have their own way of keeping track. I have seen Quickbook invoices, normal invoices, home grown solutions, etc.

5) The contract is essentially the mortgage and the personal guarantee for the funds. Every lender differs in the paperwork arena but all want a personal guarantee, mortgage, note, title commitment, and other miscellaneous items.

Call me if you have other questions and I will try to answer as best as I can.

-AP 

@Bryan Kunka: There would be two points I would consider. The first is what you stated in that of the people you have spoken to already, what do they look like they could invest versus their net worth. If they lend you 50k and all they have the in the world is 50k then I don't think the fund would work because there are some basic criteria that you need to hit for the investor profiles to be able to invest in the fund; plus, I'm always concerned when someone wants to put a high percentage of their net worth with me - that's a lot of concentrated risk for them. The fund is pretty specifically geared to sophisticated investors (people who are worth 1 million in assets less the equity of their principal residence if positive but included if they are upside down, or make I think 250k a year for the past two years and can reasonably expect to make the same this year or 350k for married with the same criteria) but a perk that comes out of the fund is the ability to market for investors in the form of general solicitation (new print, flyers, radio, etc.). I think that falls under the 506(c) but you'll have to contact a securities lawyer for all that. In general, if you have just a handful of people that can satisfy your financing needs then I'd go the private money route. If you want to aggressively pursue raising capital and don't have just a few people who are close to you that can satisfy your private lending needs then I'd take a look at the fund and use the solicitation angle to raise funds from people you don't currently know. I hope that framework helps you make a decision. You can PM me or call me to discuss further.

Agreed with the other posts in that you will have legal challenges either way. I think the main determining factors are the type of people or institutions you have access to now. For instance, if I have many private individuals that I knew who wanted in, then I'd go the private money route and keep them all separate to minimize some portfolio risk and keep that personal attachment. If you know more of the institutionalized lending people then maybe a fund might be better in that they will demand a different level of accounting standards and are more focused on the metrics than the relationship. Just depends on your contact list in my opinion. Ultimately the Fund is better in that you can probably raise more funds that route but it also depends on how much you are looking to raise.

Hello, my name is Arpan Patel and we are fix and flip investors in Illinois moving into Indiana. In Indiana we are only looking to BRRRR. We have extensive flipping experience (sold 6 homes this year and have another 6 on the books and a combined 17 years experience - 10 for my partner and 7 for me) and extensive turnkey and property management experience (my partner from 2000-2008 sold then managed 50 SFR units in the south side of Chicago). We are looking for investors who would like to partner on acquiring and holding rental properties in C+ to B+ areas in the northwest counties of Indiana. We have multiple short term lenders lined up along with and 3 intermediate term lenders (who can do cash our refinance loans with no seasoning) to pull out all the initial investment in the deal while still retaining 30% equity and 1.2 or better debt coverage. We will find, fix, tenant and manage the tenant and asset along with the managing the financing process. We are looking for investors who have 25-30k and good credit to be our 50-50 partner for long term holds and who want many rentals in their portfolio with a 6 year or more time horizon. We are not looking for someone who only eventually wants just one or two units. Email or call me if you are interested. My contact information is on my profile.

We have a similar issue in that we don't want to wait for seasoning. I'd suggest to introduce an intermediate lender. That is what we are planning on doing. That intermediate lending is meant to allow us to get the time to acquire more assets and fill the bucket up and then get a large blanket. It is more paperwork but can be systematized. PM or call me if you want to know how we are operating.

Yup and Centier bank will not look at single families at all. Just an fyi

You many still have a problem because each lender will want to be first position. Something to consider and ask your lenders about. as an example, my lenders don't want any other liens at all. They are first and no one can be second.