All Forum Posts by: Brett Laycock

Thanks Joel. I was receiving different information and wanted to put it out here for consensus. I'm not sure how much more work is involved on the commercial side but I also though $240,000 (3%/3%) was excessive on a $4M building in a hot market.

I've searched the forums but not found my exact answer.

I'll be listing a 28 unit apartment building for $4MM. Do I pay buyer broker fees like single family? What is a reasonable commission percent on a property this size. I get a lot of beating around the bush when I ask potential brokers wanting this listing.

I'm looking for a attorney specializing in oil and mineral rights. The property is in western Pennsylvania.

Thanks to everyone that responded. I had a feeling this was the case and thus a cost seg study will not be a benefit to me.

My losses are passive due to W2 income. My 7 plex already show a small loss due to depreciation and expenses. Is Cost Segregation a waste of money? If my passive losses are capped it would seem more losses due to accelerated depreciation won’t benefit me. 
Am I missing something here? 

I’m looking for advice on selling part of a cash flowing apartment complex.

Why? I’m at the end of a full gut and remodel of 28 units. I need about $300,000 to finish the asphalt, landscape and last unit. I also want some cash out for another project and my Freddie/Fannie refi just imploded due to Covid-19.

The property is currently financed with private money. Considering a bank bridge loan to get out if private money and through the current lending turmoil to full Fannie/Freddie refi. 

3.5MM complex, selling $100,000 units/pieces. If its in a LLC already what legal forms should I have to protect the investors and myself?
Is this still considered a syndication? 

Would this be considered a stock sale and subject to burdensome regulations?

Advice, warnings and pitfalls please.

I have a 28 unit property in Phoenix (for sale on BP). I was contacted by a company that runs halfway houses for recovery about leasing the entire property. This idea grabbed my attention. I'm looking for anyone that runs halfway houses as a back up plan. If you are involved in recovery houses or know someone who does please contact me. 

This property has potential for a dining hall/common area.

Thanks

24 units complete with 22 units rented. Laundry, vending, rentable storage room complete. 3 more units coming on line any day with two being 2 bd. Tenants waiting on the 2bd. Collecting $800/month on the one bedrooms. Due to unexpected repairs we will be into this at 2.5MM but at 6CAP new value is 3.4MM+. Hot market may see 4.0MM at sale. Rents scheduled to go up to $900 for 1 bed in 2020. Looking for a equity partner to bring needed capital to push this to the finish.

Investment Info:

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

Purchase price: $600,000
Cash invested: $400,000

1950 drive-in motel. 90% gutted. Only the brick walls remained. New everything including water main, roofs, asphalt, power lines. Sub-metered each unit.
$950,000 construction loan. $1.38MM Lien. ARV appraisal $2.135MM (low).

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

28 doors at about $21,000 per door. Located In the next revitalization area of Phoenix. Tip of the spear as this area begins to turn around. 3 schools (1block away), postal facility and possibly a new VA hospital. Great potential tenants.

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

Business partner has been trying to purchase this property for over a year. After a negotiated price the city shut the property down for safety violations. We lowered our price more and they accepted.

How did you finance this deal?

Owner financing unti we realized nobody would loan us construction funds in second position. Refinance whole package with hard money.
2.5pts, 10.5% interest, 9 months

How did you add value to the deal?

New everything (low maintenance), sub meters (minimal electric bills). Purchased very cheap.
1.35MM lien. 2.1MM appraisal ARV

What was the outcome?

Still under construction. First units ready to rent Feb 1, 2019

Lessons learned? Challenges?

Plan for the worst. Extensive termite repair $50,000 that was not anticipated. Water main was “good” when inspected but bad when we started connecting in. Power company charged $18,000 for new power poles and lines (unanticipated) and held up project 2.5months due to their schedule.

Final thought. 

If you take all your IRA now and pay tax it will push you into a higher tax bracket. If you use the SDIRA and take distributions you should be able to keep yourself in a lower tax bracket. Talk that over with your CPA.

Good luck!