All Forum Posts by: Blake Dailey

@Ehsan Rishat Thank you. This deal came from my first campaign once I was stationed here. So it was one out of a hundred or so. I try to make tailored pieces with higher conversions. 

@Zack Thiesen thank you!

@Michelle Reid thank you! My partners "@s" aren't showing up but it's Melissa Haworth, JD Monroe, and Annabelle Monroe- all great people and great investors active here in PC as well. I'm very fortunate to have had their support on the project! I actually met them at a REI meetup last summer and we just built the relationship and it's been a good profitable one so far.

Investment Info:

Single-family residence buy & hold investment in Panama City.

Purchase price: $53,250
Cash invested: $850

This was my first BRRRR deal and I learned a ton along the way! I bought a hurricane damaged home here in Panama City with a low-down, seller financed note and leveraged a partnership for the rehab costs. In doing so I now have a solid rental property in my portfolio for almost nothing out of pocket!

What made you interested in investing in this type of deal?

This property is close to the Air Force base which is a big plus to be close to a population of potential tenants with good, stable income and a steady occupation. It also had low barriers to entry since I was able to negotiate a price low enough that would justify doing a full gut job renovation and bringing in a partner for that.

How did you find this deal and how did you negotiate it?

I found this deal through direct mail. I met the owner at the property within 15 minutes of receiving his call and began to build rapport with him. I asked if he would consider seller financing it if the numbers worked for him and if we put a balloon payment on the note. He agreed.

How did you finance this deal?

I financed this deal through the seller and used a partner to provide the low down payment and renovation costs.

How did you add value to the deal?

We did a full renovation on the property to force appreciation.

What was the outcome?

The outcome was a like-new home at the end of the renovation. Not everything went perfect, but it went well considering it was my first time through the process. I built a relationship with a local bank who does portfolio loans, and borrowed 80% LTV based on the new appraised value. In doing so I was able to pull out the full cost of acquisition, renovation, and everything else - plus a return to my partner for investing in the deal with me. Now I own the property free and clear as a rental.

Lessons learned? Challenges?

Challenges were the administration for all the moving parts of the project while working full time and getting the property reappraised when the first "drive-by" appraisal came in low. I learned a lot of diligence goes into this but built good relationships along the way and am working my second deal with the portfolio lender and am looking at future deals with my partner from this project.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with a lot of people on this project. My partners of course being the bulk of who I worked with. Local real estate agents helped me with comps in determining ARV and a local lender provided the cash out refinance on the property. I also found good inspectors, surveyors, appraisers as a result of this deal.

Investment Info:

Single-family residence buy & hold investment in Panama City.

Purchase price: $53,250
Cash invested: $850

This was my first BRRRR deal and I learned a ton along the way. I found the property from direct mail, negotiated seller financing with low down, and then leveraged a partnership for the acquisition and rehab costs. I was able to buy it at the right price and bring in investors with a lot more experience rehabbing properties, so I left that to them and was able to learn from them along the way. When I refinanced I paid my partner back in full plus their return and now own, free and clear, a solid rental property that should rent well and have low maintenance costs for a while.

What made you interested in investing in this type of deal?

This property is close to the Air Force base which is a big plus to be close to a population of potential tenants with good, stable income and a steady occupation. It also had low barriers to entry since I was able to negotiate a price low enough that would justify doing a full gut job renovation and bringing in a partner for that.

How did you find this deal and how did you negotiate it?

I found this deal through direct mail. I met the owner at the property within 15 minutes of receiving his call and began to build rapport with him. I asked if he would consider seller financing it if the numbers worked for him and if we put a balloon payment on the note. He agreed.

How did you finance this deal?

I financed this deal through the seller and used a partner to provide the low down payment and renovation costs.

How did you add value to the deal?

We did a full renovation on the property to force appreciation.

What was the outcome?

The outcome was a like-new home at the end of the renovation. Not everything went perfect, but it went well considering it was my first time through the process. I built a relationship with a local bank who does portfolio loans, and borrowed 80% LTV based on the new appraised value. In doing so I was able to pull out the full cost of acquisition, renovation, and everything else - plus a return to my partner for investing in the deal with me. Now I own the property free and clear as a rental.

Lessons learned? Challenges?

Challenges were the administration for all the moving parts of the project while working full time and getting the property reappraised when the first "drive-by" appraisal came in low. I learned a lot of diligence goes into this but built good relationships along the way and am working my second deal with the portfolio lender and am looking at future deals with my partner from this project.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with a lot of people on this project. My partners of course being the bulk of who I worked with. Local real estate agents helped me with comps in determining ARV and a local lender provided the cash out refinance on the property. I also found good inspectors, surveyors, appraisers as a result of this deal.

@Vish Rav I have a very similar situation going on. The seller did not perform and sign on the closing date so my money is still in escrow and I did not take title. I talked to an attorney and what they usually do is write up a letter and send it to the seller essentially to flex their muscles. The attorney will say that the seller did not uphold their end up the contract and if they do not then we will come after them and they will be forced to (if the suite goes in my favor) at their expense. I was working with a transactional agent who was no help at all so hopefully your agent can resolve the EMD issue before it comes to the attorney.

@John Barrows thanks for the reply. This was a quick turn around- the contract was signed last Wednesday, sent in to the title company, and the title company sent it to me Tuesday morning (the day of closing). That's when I noticed the HUD was incorrect based on what we signed on - the agent had talked to the title agent and gave her information for closing outside of what is in the contract.

The seller showed up to closing yesterday trying to negotiate a higher down payment, as if we had not already negotiated and signed the purchase agreement. She didn't end up signing at closing. I even offered her to give an extra 5k at closing, on top of me paying all closing costs and she still didn't sign.

Now do I attempt to uphold the contract with an injunction since she knowingly signed the contract which says the seller must perform? Or do I just cut my losses and try to get my EMD back? I want what is best for everyone here but still feel like the signed contract should be respected.

Below is the backgroud of what happened with the agent trying to change the terms after the purchase agreement was signed by both parties, and the question of what to do about it.

I have a signed contract to purchase a 2-unit, which will become a STR once it is rehabbed and furnished. I found this on Zillow advertised as "seller financing witt low terms" and had sat on the market for 6 months due to it not being a standard SFR and not being a standard Duplex - so I can get the best use of the property as an STR. Originally, I was told by the agent that the seller just needed enough down to cover the remaining 15k on the mortgage, and wanted closing costs paid for, and $700/mon. So I offered to do a lease option, pay the remaining mortgage until its paid off, and pay the seller. I still would cash flow well with being essentially zero down on the purchase. In the midst of this the seller received insurance money and paid the remaining loan balance so the agent told me because of that the seller wanted to seller finance to complete the sale now, and that cash down was not as important as the monthly payments and just getting the house sold (Afterall is sat for 6 months). So I offered her asking price with 100% financed at the payments she wanted, with a five year balloon. The same net result for the seller but my cashflow would increase because of only one payment - to the seller. The agent said the seller said that would be fine.

After another week of whatever the agent was doing she came back and asked for 20k down. I said that changes the deal considerably and would probably just move on. She said okay fine, that the seller just needed it sold. She immediately sent me the contract, written up as 115k purchase price, loan amount 115k, 30yr am, 5 yr balloon, at 5% interest, and normal buyer and sellers closing costs. We both signed.

Today is the day of closing, I get sent a copy of the HUD from the title company stating I am paying 15k down. I correct the title company and send them a copy of the contract. I also let the agent know, assuming she might have told the title company I was paying money down for some reason. She did tell the title company that and tells me she thought I was putting 15k down. I told her - from the beginning its been zero down due to the money I have to put into repairs, and that I could satisfy all the sellers other requests, to which we have a signed contract.

 My worry is that the agent misled the seller to believe she was getting 15k down, while telling me it was zero down. Maybe just to trying to get it sold and earn her commission? She seemed like nice enough however - so my guess is just incompetence. Now we have a signed contract, are supposed to close, and a new found disagreement after all of our negotiations AND signed contract by both parties. I offered to pay all the closing costs, even though she wrote the contract for the seller to pay normal seller's costs.

What am I to do? 

@Kyle Deutschmann yeah man you too, hope you are doing well up there in TN. That’s a good point about the total turnover/vacancy cost- I’ll have to add that in compared to the opportunity cost of renting at a lower rate for longer time. Thanks for the advice! 

I am about to go through the same situation. I have rental property in the panhandle that is currently being renovated with expected completion next or the following week - so only weeks before Christmas. I know not to lower my standards and get a bad tenant, but am planning to lower the price to make it very attractive and hopefully rent by January. @Kyle Deutschmann I like the idea of a lease expiring during the summer, and I could charge the market rent then and be fine because after this reno it will be like a new home, but am worried about potential turnover if I raise the rent like that after a 6 month lease. Have you dealt with that in your units?