All Forum Posts by: Scott E.

Sounds like you already approached them lol.

Now that you've broken the ice, just have another conversation with them. First rule of negotiation is to let them present their terms first.

So instead of saying "I'm very interested... I think I can pay around $XXX,XXX... can you give me some more info?"

Instead say "Hey remember when you said you might be interested in selling your house. I might be interested. What price did you have in mind?"

I know it doesn't feel right but credit cards are probably your best bet for something this small.

It doesn't make sense to do a cash-out refinance 1st mortgage. You wouldn't even be able to get a 1st mortgage that small anyway.

A 1st position HELOC is an option. But the property is vacant right now... it'll be tough finding somebody to write that loan. Plus much like credit cards, HELOC rates are crazy high right now too.

What do you project for monthly rent? You'll probably be able to pay down the renovation debt within 6-12 months. That's nothing in the grand scheme of life.

I rented a furnished single family home out here in Scottsdale to a group of college students for a couple of years and it was great. They paid $3,400 per month. My realtor told me if the home was unfurnished, it would have brought closer to $2,500 per month.

How were you finding deals in "yesterdays" market?

Arn don't take this the wrong way, but I don't see any of these tips actually generating capital for a syndication deal.

-Just telling your friends, family, and business associates that you are going to start buying apartments isn't going to translate to capital pouring in. You need to sell.

-Going to conferences is great for education, motivation, and general networking. But most people who attend these conferences and meet ups are never going to find a penny for their deals. 98% of the people in the room are going to be novices with no investing experience (let alone capital to invest).

-Facebook groups are a mess to navigate. Sure there are hundreds of them out there. But simply joining some MF Facebook groups isn't going to get you any real money in your pocket for a deal either.

I'm not trying to pick your post apart or be a jerk. You own an investment group (according to your signature) so I'm guessing you know your stuff. I just happen to be in a situation similar to the original poster. I've been developing residential for over a decade and really would like to scale up and start raising money for bigger deals over the next decade. But the hardest part for me has been raising capital. 

This is interesting. If I were in your shoes I'd call a credit union and try for a SBA loan.

@Lyndsay Zwirlein might have some better direction for you.

MTR and STR are not the same thing. As far as I understand, there really is no such thing as a mid-term rental. It's just a made up buzz word used online. If you go 'by the book', a property rented out for over a month is to be treated like a long term rental.

If you want to get a better understanding of what's permitted, just walk into your local city hall and sit down to talk with somebody about your plans.

All of this aside, I'm curious what the return would look like on a traditional long term rental. I know you say you don't love the landlord tenant laws. But what would your ROI be on this property after you rehab it?

Yes that's why I was saying to go for the HELOC.

Didn't realize that you had a balloon on the 1st mortgage. That is an unusual loan for a residential deal.

I'd start having conversations with other builders now to get a sense for what the market wants, and what other more experienced builders see as the best use for this lot.

The issue with you going through rezoning/entitlements to subdivide is that this is going to take you a year or more, you're going to spend tens of thousands of dollars, and the end buyer might not even want to build what you have approved.

Would an experienced builder build single family here, or townhomes? Would they want 2, 3, or 4 parcels? Would they want single story or 2 story? What style of architecture? Etc, etc.

Is your goal with this project to get the tenants out, renovate, and then release the units?

Sounds like you want these tenants to be month-to-month. That's why I ask.

I've only done 2 commercial deals and on both I asked for a tenant interview during my due diligence window. The brokers, sellers, and tenants all agreed. You should do a tenant interview here. You'll learn a lot about the tenant and the building.