All Forum Posts by: Bob Woelfel

@Salvador Santolucito I would just be yourself and use the lease as your guide.  If you are referencing the lease just say "per the lease".  I'm not an attorney so I don't try to act like one.  Thankfully though my wife is so I just refer to her from time to time when talking about why certain things are in the lease, etc. 

Be thankful they are responding in a professional manner.  It doesn't always work that way.  

@Aaron Millis these aren't private lenders when people are talking about scam artists.  Private lenders are people you know.  They are your friends, family, people in your circle or acquaintances you get introduced to, etc.  Maybe they might be people you've met at a real estate investing meeting and you form a relationship with.  

What you are speaking about is something I've seen more and more on this site.  People get hit up saying they've got all this money to lend.  Sounds like they are quick to basically give the investor whatever they want, but they just have to pay some fee first, etc etc.  

Real lenders ask about the deal.  They want to see the numbers.  They want to see a scope of work or proforma.  They want to hear about your experience and they want to know how you are going to not LOSE their money.  Those are the questions they ask.  

What I can't figure out is why everyone is so quick to get sucked into working with people they don't know or have never met when there are plenty of legitimate private and hard money lenders in your own back yard.

@Gregory Groff I mean if the deal is good enough then why not.  You'll just have to take care of the eviction or getting them out after you close.  I would have an offer price asking them to get the person out, but have another offer price is they refuse.  

@Todd Freeman Jr you get in touch with the owner via sending them a letter, postcard or leaving a note on the door in case they come back to check in on the property.  Or there are skip tracing services where you can probably find their phone number and call them.  Good luck.

@Stevan Radojevic how do you approach what?  Are you asking how you approach the owner and agree on a price?  Do they have it listed or is it for sale already?  We need more information.

If it's already for sale I would imagine they are trying to sell it at a price that would reflect the building being 100% occupied.  The challenge is that most investors aren't going to want to pay for 50% vacancy, but the value of the building is based on other 4 plex comps and not the income approach since it's not 5+ units.  If you are indeed asking how you approach the deal as far as price goes I"m guessing you'll have to meet in the middle.

@Slawek Jakubowski You can really do whatever you want.  I don't know the legalities of it or if a change in ownership starts the process over.  If it were me I'd probably want to wait until it's finalized and would try to get it in the contract that they have to deliver the unit vacant.  If that doesn't work and you are getting a great deal then I guess you could just close on it and deal with getting the tenant out after the fact.  Just factor the time and money into the deal.  Good luck!

@Jonathon Moore read and get educated, but mostly just start looking at and analyzing deals.  I started by looking at Zillow and finding the areas where the rents were above $800 a month (this was the minimum for me in my market), but prices were low.  Not bad areas, but areas where the price to rent ratio was good.  Then I just started running numbers and seeing what the returns were.  Trying finding and area that you like and where the numbers work.  Then try finding deals that match what you are looking for in that area.  Best of luck.

@Nicholas Morgan you could approach this a few different ways.  You could do what the hard money lenders do and basically tell new clients that rates are between 10-15% and points from 0-4 depending on the deal, etc.  Or you could say that you "offer" rates at a flat 12%, etc.  When I'm talking to a new now lender I basically just tell them what we'll pay.  If there is some negotiating I don't necessarily mind because we can typically come to an agreement that's a win win.  If they aren't interested I find it's mostly because they aren't interested in lending period or don't trust you.  It's rarely because they want 12% and you only want to pay 10%, etc.  I would just keep it open ended to see who is interested and if they want to chat more then you can get into the details of what you should pay.  As a new investor working with new lenders the bulk of the questions you will get will be about how they are protected and how you aren't going to LOSE their money.  I would prepare for that conversation more than I would worry about rates of return.  Best of luck.

@Account Closed in pretty much every market on Craigslist you can find investors who are selling properties via lease option, owner finance or other strategies.  These are real people doing real deals.  I would start there first.

@Brian Schmidt...when we do a renovation/BRRR we typically start looking for a tenant with about 2 weeks left in the job. Basically by that point everything has probably been painted, cabinets are in and flooring may even be done. What you want to have is enough completed that it doesn't look like a total construction site when you take pictures or bring people through. You want to have it picked up as much as you can when you take photos as well. That way when people come through they can see the quality of work that has been done and actually picture themselves living there. They won't be able to do this with stuff all over the place. I also have a direct and honest conversation with them over the phone before we show it that we are not done with the job and I point out all of the things we are still going to do to finish up. The tenants you want are the ones who are very complimentary to the work that has already been done and are genuinely excited about living in the space because of how nice it is. We advertise mostly on Zillow and the other connecting sites and this is how we get the majority of our leads. I don't put signs in the yard as you get a lot of tire kickers calling with no idea on how much rent you will charge. I also dont like to advertise that I have a vacant property:). Typically, we will have a lease signed with a tenant before we are finished with the job and that allows us the time period before they move in to finish up. If your renovation is good and the price is right you should not have a problem finding someone who wants it. We always hear that our rental is one of if not the nicest they have seen in their price range. Best of luck.