All Forum Posts by: Bryan Hartlen

@Gil Ganz and @Chris Seveney Do either of you differentiate between an original note or a loan mod?  As an example, if a loan modification is current and has 12 months of on time payments would you call that a performing note?  I would.  

The more people I talk with the more it appears that there isn't a firm definition of performance; or folks are liberally using the terms depending on whether they are buying or selling.  

Is there a trusted source that defines these terms?  If not, how is your definition different from mine?

• Performing:  all payments current and on time over the last 12 months.  Could be an original note or a loan mod.
• Re-performing: current but has missed one or more payments over the last 12 months.  Could be an original note or a loan mod.
• Semi-Performing: not current but making regular payments (eg 1 or 2 months behind for the last 6 months)
• Non-Performing: not current, making no payments or sporadic payments.

I agree with all the comments on getting the details on income and expenses (T12). Your broker should be able to get these for you (it is there job).

The only other thing I’d use in the offer decision is what is the market’s cap rate?

Thx.  Got it.  We're targeting value add properties so our budgets typically include 8 - 10k or more for interior rehab plus exterior and mechanicals.  What we haven't figured out is a good starting point for on hand reserves?  If it's a planned flip exit we model this very thin with minimal risk.  If it's a hold then what?  5% or some amount / door?

 Do you go into value-add deals with the $5k/door in reserve or so you build up to it over time using cashflow?

Thanks @Chad U.

@Dan Sarao completely agree.... It's marketing.  Great example is pictures.  If you happen to invest locally, have you ever walked a property where the property looked as good as the pictures?  Same goes for the financials - they're painted with rose color lenses.

Ask the selling broker for the last 12 months income statement and rent roll.

Many are performa cap rates.  Always check actual income and expenses to see how close reality is to the marketing.