All Forum Posts by: Bryce Y.
Bryce Y. has started 23 posts and replied 299 times.
Post: Syndication/Partnership

- Dallas, TX
- Posts 308
- Votes 59
I'll defer to the judgement of more experienced syndicators, but it looks okay to me. As a potential investor, I would want to know how you are getting your deals (don't have to answer that here obviously), how much equity capture you are getting at purchase, and how you arrive at the 320k sales price.
Post: Syndication/Partnership

- Dallas, TX
- Posts 308
- Votes 59
Maybe I am the one confused. Are you buying them for $4m, then selling them for $8m, leaving $4m of profit? The proceeds from the sale would be applied to returning investor capital first. Once everything is returned only then would you split.
Post: Syndication/Partnership

- Dallas, TX
- Posts 308
- Votes 59
Originally posted by @Leo F.:
Juan,
I like the way you laid this out so simply, this seem like a very straight forward approach. On the deals that you are giving 8-11% return on their money, I presume the investors are putting up all or most of the money? Then you are taking 35% of profits, investors 65%.
I am trying to apply your frame work into what I would like to with acquiring 20-30 SFR per year as I indicated in my post.
If I can acquire 25 homes per year at $160k (purch/renovations) = $4M (Investor money) at 8% = $320k per year or $27k per month.
Rent Rolls $2,200 per mo. x 25 = $55k
Investor 8% per mo. = 27k
Taxes/Insur $9,800 per prop x 25 = $245k or $20k per month
Net profits for us = $8k per month
The net profit for us is not much with these parameters, until I get to at least 100 SFR's. But, the back end profits of 35-40% for us would be tremendous given the fact that each home we have will have a min of $160k equity/profits. So on every 25 props they we sell, there is approx. $4M. If we give investor 60% ($2.4M) and we get 40% ($1.6M).
Does my above scenario seem like something that can be done?
Thanks
You are essentially looking for 100% financing (no skin in the game) and giving an 8% pref + 65/35 split. Not unreasonable if you have experience. The first problem is your expenses are way understated. You will have other expenses besides taxes and insurance. Also the 65/35 split is for profits only, not "equity/profits". THink about it from the investor's standpoint: they would put up $4m, get 8% pref, then when you sell for $4m, they take a 35% haircut?!? Realistically if you sell for $4m, they get $4m and you get 0.
Post: who would I foreclose on?

- Dallas, TX
- Posts 308
- Votes 59
Good discussion, I'm learning a lot! I'm still trying to wrap my head around getting a DIL in a different name/entity than the note holder. Apparently it is legal and done all the time as evidenced by this thread but it just seems weird to me. I need to think about it more...
Here is how I see it, correct me if I'm wrong. The ultimate goal is to get clear title. After buying the 1st lien note you can either foreclose to wipe out junior liens or do this DIL strategy. The advantage of the DIL strategy is it speeds up and allows you to control the foreclosure process since you are foreclosing on yourself. But either way you will foreclose. I'm confused when you say Acquiring the DIL in another entity name preserves your ability to foreclose on the collateral in the event that you later discover that you need to perfect title via foreclosure. Why would you get the DIL and not foreclose?
Post: Denver rehab complete: Before and after pics + preliminary numbers!

- Dallas, TX
- Posts 308
- Votes 59
Very nice! The only small criticism I have is the flush mount light fixtures. That, plus the lack of ceiling fans might turn off some buyers.
Post: Experiences investing in trust deeds

- Dallas, TX
- Posts 308
- Votes 59
Originally posted by @Rob Cee:
Thanks for the explanation Dave, that is good info. So Dave you are saying, if I went to you to get a hard money cash out refinance on my rental 4-plex and I checked the box on the 1003 that I do NOT plan to occupy as my primary residence, but then I went used the cash out proceeds to go to Hawaii or have my grandma move into one of the units, that trust deed your originated is now considered a "consumer loan"? And what are the consequences for the lender for that being a consumer loan? Can you point me to more info on that specific law somewhere?
I'm also curious about this but in the case of an investor using the loan proceeds to go to Hawaii, typically this is the reason HML's only release rehab $ on completed work. The investor must use his own funds to complete the work first, so technically the loan amounts are a reimbursement.
No legal advice
Post: Update on 9 unit Multi-Family: Not such great news

- Dallas, TX
- Posts 308
- Votes 59
The exterior looks really nice. I would give it another week or so and adjust accordingly. 5 days isn't much but then again I'd expect at least a couple applicants out of 10 showings.
It's hard to tell from the pics but the stairs don't look too bad. I have a 4-plex that looks similar and the tenants have no problem getting beds up there.
Post: Update on 9 unit Multi-Family: Not such great news

- Dallas, TX
- Posts 308
- Votes 59
Nice job! I'm curious as to why you went with such a high end kitchen remodel (granite, ss)? Generally I'd think at those price points it's not the norm (?) but I don't know the market up there too well.
Also I don't mean to toot my own horn but here's what I posted in your old thread http://www.biggerpockets.com/forums/432/topics/107712-what-to-do-with-small-three-bedroom-units:
Taking a quick look at lease comps I think your estimate of 900-950 may be a bit aggressive.
The comps I saw were on Legends Dr. That subdivision it seems was built in 05-06. A typical 3/2.5/2 rents for around $1250. Yours being a small 3/1/0 or 2/1/0 on a main road, I would use 750-800 for analysis purposes. If you can get more, great, but there aren't (m)any like comps so I'd be conservative.
How long has it been on market? Your pm seems to be pricing it at the very top of the market. You probably eventually could get it rented but it might take a while and you may be faced with turnover in a year. I would drop it to 850-875 and try to get some cash coming in asap.
Post: So what qualifies a borrower for a hard money loan?(+ a few questions)

- Dallas, TX
- Posts 308
- Votes 59
You would be a pretty good candidate. Most HMLs look primarily at the quality of the deal first and foremost, your experience/track record, and liquidity. As a general rule about 20% of the loan amount in cash. This is to complete the rehab and contingency if the deal goes south. Your other free and clear properties should definitely help as the HML could use those as additional collateral.
Post: Landlord next door says my roof causes his roof damage

- Dallas, TX
- Posts 308
- Votes 59
Did you actually verify the $3370 amount?