All Forum Posts by: Anthony Palmiotto

I don't think duplex deals belong in this section, and if they do, that should be changed. This section should be for 5+ (really 10+) units that you would have to use commercial financing for.

Still interested in hearing anyone else's experience with this!

Bill Gulley thank you for your reply. In my area of the country (central and northern NJ) there are certainly institutional investors but there are also many local owners who always use brokers which I guess works to my advantage.

Can you further explain your first paragraph as I am a little confused? Rather than the seller paying me a commission, you as the buyer, would pay my commission by giving me an equity stake? Am I understanding that correctly? How would that make you better off?

I think I am missing something.

Bill Gulley thanks for your input. Not sure why you are putting "investors" in quotes. Are you inferring that one would not be an investor in that case? The whole idea of predatory lending or "taking advantage" of people is just silly in a free market.

When two able bodied people enter into an agreement on their own free will, that should be the end of it. There should be no regulation on the matter.

The fact that there is regulation cause me to start this thread and make, as I stated, an "overly simple" example to illustrate my question. I'm not sure that a snarky response was needed.

I recently had the pleasure of speaking with a best selling real estate author. I never thought I would have a chance to speak with that person but after calling their office they agreed to have a 15 minute call with me...the cool story of getting to pick the brain of a best selling author and multi millionaire real estate entrepreneur is a story for a different day though...

Among the things I asked that person was what is the best way to transition from just being a broker on large multifamily deals to actually buying multifamily units. One part of his answer included "rolling commissions" into your deals. I assume it would work like this:

A multifamily property is going to be sold for $5,000,000. A 2% commission would be $100,000 on this deal. Let's assume I split that $100k evenly with my company. I could instead ask the buyer to cut me in on the deal and give me a $50,000 equity stake in the property. In return, the seller will lower the price to $4,950,000 because he now does not have to pay me a commission, only pay my company's share of the commission.

I think that is the basic idea of how that works. Does anyone have any experience with this? Is that how it works? What is the upside and downside of doing this?

I assume a downside would be that you would just be a limited partner and would not have much say in decisions. Anything else?

Thanks in advance for your help!

A lot of good answers here but one key is to remember that these properties are valued based on the income they produce rather than comps of single family houses.

I actually checked my county's Lis Pendans list yesterday...the only problem is that it lists every single property with no ability to sort by what type. In NJ apartments are classified as "4C" and there is no ability to look just at those properties...

I will certainly keep an eye on this topic though.

I believe you'd be looking at a commercial loan with an LTV more in the 70% range. Once you get to the bigger properties the banks care more about the cash flow and management rather than your own personal credit score.

Obviously there are plenty of threads discussing the SAFE Act and how they impact Lonnie Deals. I understand that these laws may differ from state to state but my question is a simple one.

I'll make an overly simple example:

There's a mobile home worth $6,000 that I can buy for $2,500.

I buy it and it needs no rehab so I look to sell it with owner financing for $6,000 at 12% interest.

This is where the SAFE Act comes into play but what if I just sold the mobile home interest free for a higher amount?

Let's say instead I charged $9,000 which I would collect over 3 years. (I can do this because the buy is more worried about the monthly payment than the total price.)

To me that sounds more like installment payments for a piece of personal property than a mortgage...

Am I missing something? Has anyone tried that? Is that legal under the SAFE Act?

It's hard to say what year will bring the crash but the economy will get much worse than it is now. Obama and Co. will kick the can down the road until the whole thing implodes which will be much worse than 2008. Read some Peter Schiff books and get ready.