All Forum Posts by: Blake Dailey

@Carlos Albarracin 

1) Find a capital partner to bring the down payment

2) Depending on the owner, offer a master lease option or seller financing. Maybe offer them equity in the business to make it worth it for them?

3) Open up lines of credit on the properties you already own for the down payment.

4) Sell your existing properties, and use that cash proceeds and reinvest the rest (if any)

5) SBA loans

6) LOC on a business credit card with 0% APR for the first year (only if there is equity in the property that you can leverage or your business cash flows enough to pay off that amount before the 0% interest period is over)

7) Raise the money from friends or family and offer them a return on their investment

@Kaylee Walterbach As a 24-year old who recently syndicated their first multifamily deal, while being an active duty Air Force officer, I believe it's a willingness to consistently do what others won't and a compulsion to get around the right people. Multifamily investing is a people business - make yourself valuable and find the right team.

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $6,250,000
Cash invested: $1,750,000

This is 66-unit multifamily syndication. My first of what is hopefully many!

It is a value-add deal where we will make improvements to the property and to the operation, increase rents, and hold for ~5 years.

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

This is truthfully one of the best multifamily deals I have seen in the past year. It had meat on the bone from an operational perspective for us to come in and re-evaluate/cut vendor contracts to immediately reduce expenses and then ample room to raise the income such as adding additional storage for tenants, charging for covered parking, and then increasing rents to market rate. It is also in a fantastic sub-market within Greensboro with a great tenant class and nearby amenities.

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

My partners found the deal through a relationship with a broker. They have connections to the local market were able to jump on this deal. The seller was at the end of their business plan and it was time to sell so we came in with a strong offer and deposit. Upon due diligence, we negotiated a $175k closing credit from the seller for added repairs.

How did you finance this deal?

We syndicated this deal and raised money from private investors to knock it down. My role was to raise a portion of the amount needed to close (down payment, repairs, reserves, etc.).

We got a Freddie Mac Small Balance Loan (SBL) at 3.54% amortized over 30 years. It is low rate, long-term, and non-recourse. All the things we love in financing.

How did you add value to the deal?

We will cut excessive vendor contracts, add additional storage, charge for covered parking, renovate 15 outdated units and increase rents ~$130/unit. The property had been running high on expenses so right off the bat we had the opportunity to increase our NOI on this deal.

What was the outcome?

We successfully closed our first syndication. We also brought in several first-time passive investors, or LPs, who are experiencing investing in syndications for the first time. It's been awesome to put a great deal together while expanding those who are positively impacted by investing in real estate!

Lessons learned? Challenges?

Raise more than you think you need! I thought my first raise would be easier than it actually was. When it comes to actually wiring in the money, people who I thought for sure would be in ended up not investing in the deal. It humbled me and made me realize that raising private capital is a completely different side of the business. But through that, I surprised myself and found capital from other people who more than willing to get into this great deal so it worked out - thankfully!

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $357,000
Cash invested: $286,000

This is an 8 unit BRRRR'nb (BRRRR and rent as a short term rental). It's a full gut rehab and upon stabilization will net cash flow around $35k/year.

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

I was searching for distressed motels in good locations for the possibility to convert to residential multifamily. With the struggling hotel industry there are discounted assets so I set out to find a viable conversion project.

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

I found this deal (interestingly enough) on LoopNet. It was listed under the hospitality tab. The seller wouldn't budge on his price but I negotiated that for him to get his price he would need to carry the note. His price, my terms

How did you finance this deal?

The seller financed the property for 20% down at 4.32% and payments starting in 60 days, with a 2-year balloon. I'm okay with the price because my numbers still worked and I got cheap financing on better terms than a bank would have offered for the property.

How did you add value to the deal?

We are doing a full gut rehab on the property and in the end will basically be a new property with high cash flow because each unit will be rented on Airbnb rather than as a motel.

What was the outcome?

The rehab is still underway. The property should be rented and I'll refinance the initial capital out mid-2021.

Lessons learned? Challenges?

This was the most difficult seller I have ever worked with. He pushed back closing, took things off the property that were supposed to convey with the sale, harrassed my contractors, and even filled up one of our dumpsters during demolition after we had already closed. I learned patience for sure!

@Luke Carl I like the name you put to it. I just call it ghost shopping. I will scout the market for my competition and find what they are charging and base my prices off of that. I do that for apartment rental rates, SFR and of course it works with STRs. I have also found AirDNA to be fairly accurate because it aggregates most of what is on the short term platforms.

@Chris Odell I'm active duty as well here in Panama City, and have a few STRs here on top of rehabbing a commercial property that will be a STR. I'd be happy to help or share any of my contacts that may help as well. Feel free to shoot me a message!

@Bryan Crawford congrats on pulling the trigger! You'll have to fill me in at the next meetup! I usually get most of my furnishings from the Facebook marketplace. We have gotten amazing deals on there and it's a good way to get started on the cheap. For insurance in this area, STRs are usually an additional $50 to a premium. If it's more than that reach out to Holloman or Affordable Home Insurance. Also start with Airbnb and as you build up reviews you can try out listing across all the platforms, but in PC about 90%+ of bookings come from Airbnb so it's best to build reviews there first. No LLC necessary, between being highly leveraged with a new purchase, having homeowners insurance with STR coverage, and the Airbnb host guarantee you will be in good shape in any worst-case scenario.

@Joey Sostheim 6pm at Fishale. Every first Wednesday of the month. 

@Joey Sostheim for sure! If you can, come to the meetup tonight. It's a great place to come network with others and potentially find deals. I have found deals and partners I've done deals with through the meeutp.

Investment Info:

Small multi-family (2-4 units) other investment in Panama City.

Purchase price: $130,000
Cash invested: $132,441
Sale price: $174,718

Contributors:
Logan Boesch

This was a wholetail property that could have been a great investment with a few different strategies. BRRRR'nb, flip, wholesale all could have worked. My partner and I closed it and turned around and listed the lot and sold the house to another investor to do the rehab. The timing worked out for both of us to avoid and extensive rehab and make a quick profit to allocate to other important areas in our businesses. We sold both quickly for a $41,000 net profit (before taxes).

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

Originally, I liked it for its BRRRR'nb potential (where you buy, rehab, and rent the property as a short-term rental) because it was in a good location, with a bay view and close driving distance to the beach. It also had meat on the bone to rehab. What really made the deal work, however, was the adjacent lot of land owned by the same owner. We negotiated that into the deal on one contract and that made the numbers sing for us.

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

I found this deal from a wholesaler who lost the contract so elected to give me the seller's contact info. I contacted them and we completed the deal directly with the seller (technically with a family member acting as a broker).

We negotiated the lot and the land together to make the purchase simpler for them. We also closed with cash in two weeks because time was an issue for them.

How did you finance this deal?

My partner and I used our own cash.

How did you add value to the deal?

The equity was already there. We wholetailed the lot (listed it on the MLS without doing any improvements) and sold the house to another investor who will do the rehab. We didn't list the house but an agent friend of ours brought a buyer so she made a commission. Win-win-win

What was the outcome?

We sold both the lot and the land the week before Christmas and made a $41,000 (before tax) profit. A nice little Christmas bonus for being good boys all year!

Lessons learned? Challenges?

Lots of lessons learned. I wrote a blog post on my website about this (as I do with all my deals). Basically - don't be greedy, purchase title insurance, be transparent, and help those who help you.

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

Yes, two local agents who are both rockstars in their own right.