All Forum Posts by: Christopher Brainard

@Matt Mimnagh

While I haven't used hard money in a very long time, I would never have done the deal as you describe above. Giving up 50% of the profit for financing is very high. In previous flips, I would estimate that 10% - 15% total went to the hard money lender (including points, closing costs, and interest). The lenders that I used to deal with weren't interested in carrying properties, they wanted to get in and out as fast as possible, so their money could be used in other deals. Given the high interest rate, that was my goal as well.

As @Justin Thompson mentioned above, this sounds like this strategy it is more suited for private money, which tend to have more reasonable terms and may hold the property for an extended period of time. Here, I would expect a 50%/50% split (if you are flipping the property together) or a reasonable interest rate (if you are holding the property together).

-Christopher

Morning @Joel Owens

First, let me disclose that I am not a web site designer or marketing professional, so take my advice with a grain of salt ;) 

1) You may wish to further clarify your target audience. The website says that you are targeting high and ultra high net worth investors as buyers, however, everyone has a different idea of what this means. I personally have almost 1M in assets, but I don't consider myself either of those yet, therefore, I would not do business with you. 

2) Get an email address that matches your domain. [email protected] doesn't sound very professional, given your target audience. It doesn't make you look like a well established company that has experience processing billions in transactions.

3) On the mobile website, the About | Buy | Sell | Invest | Videos | Contact black banner is missing from the top of the page. The white banner is at the footer, but I don't think this is optimal for navigation.

4) There is just something missing from the site to really make me want to invest with you. Maybe another member can help, but when I read through the pages, nothing jumps out at me and makes me think that. While I know there are legal concerns when advertising deals and/or returns, there needs to be something that makes me want to click that 'buy' or 'invest' button.

Anyhow, I hope that helps a bit. Overall, the website looks very professional.

-Christopher

@Terry Hoefer

Do the analysis and decide what the place is worth to you. That is your maximum - don't go over it. If your calculated number is slightly over list, you can always offer a bit more to try to lock down the property. I would not get caught up in a bidding war or the 'highest and best' shenanigans that sometimes go on.

As far as condos go, financing may be ok. I believe FHA currently allows up to 50% of the condos to be investor owned, so long as less than 50% of the loans are FHA. There are also some specific requirements for insurance and such. I would recommend that you verify this information with a loan officer in your state, as I am not a financial adviser!

-Christopher

Hi @Marcus Ramsey

@Michael Woodward

@Michael Woodward is correct. But even if the market were easier than it is right now, being successful always takes maximum effort, discipline, and persistence, especially in real estate. This isn't a 'get rich quick' type profession, it takes a lot of hard work and dedication to succeed.

-Christopher

Hi @Chris Seveney

While the financing is very appealing and the interest rate offered by the seller is quite reasonable, buying properties that are negative cash flow are always risky. While you may be able to build equity, you're locking up a good sized chunk of your own money and having to pay for the privilege of being a landlord. Trust me, it isn't so fun that I would pay for this privilege of being a landlord. Also, iIf things don't go right, you could quickly find yourself very negative, especially given the age of the building.

I'd recommend finding something with positive cash flow. Even if you don't need the money, you can save it and use it as a buffer for unexpected CapEx and Repairs.

-Christopher

@Paul Burrowes

Just some thoughts . . . . Your post reads just like an advertisement, something I might see on late night TV from some puffed up guru. If you're looking for private money, you need to find a solid deal that is profitable and then go hunting for an investor for it. When you have numbers and a deal to present, an investor can evaluate it and determine if it is worth the financial investment and if he is interested in partnering with you.

I believe this forum is reserved for deal analysis and advice, not advertisement.

-Christopher

@Keith Borge

As you suspected, if the property was bank owned, it would list it on the assessors website. This information should be accurate (not 100% guaranteed though).

There can be any number of reasons why the owner hasn't done anything with this property, but the easiest way to find out is to ask the owner. I would send a letter to the property address listed on the assessor's website, let him know that you're interested in purchasing the home, and ask to setup a phone call to discuss.

-Christopher

@Chris L.

I agree with @Jeremy Pace. In my opinion, the buyer who is looking at a 2/1 Duplex is not the same buyer who is looking for a 4/2 SFR. Generally speaking, I would expect the buyer of the 4/2 to pay more than the duplex buyer, if they were in the same neighborhood and condition, as the buyer pool for the 4/2 is generally larger. Additionally, the duplex is probably going to valued with a lot more attention to the potential rent that the house can bring in.

With that said, I would dig deeper into the past to look at the values of good comps that sold previously. Adjust those prices for the appreciation of real estate in the area you're working in, and you should arrive at a reasonable price for the house. If you still can't find comps, you can broaden the search area, but this is generally not as safe, as the values may differ greatly as you get further away from your subject property.

-Christopher

@Brent Seehusen

Homestead is an exemption that you can file on your primary residence to lower your tax bill. This amount varies from state to state and would not be available to non-owner occupied properties. This is available in California, but from what I recall, the exemption is pretty negligible ($7k or so off appraised value?).

@Spencer Sutton

I don't think that Turnkey companies are any better or worse than any 'seller' out there on the market. Every NOI and Cap Rate I've ever gotten from a seller was exaggerated and many of the costs associated with running a property were not factored in. I think the biggest problem most investors face when dealing with Turnkey properties is that they believe what the company tells them and do not do their own due diligence and property inspection. If they did, I have a feeling many of these purchases (which seem to be out of state) would not occur.

-Christopher

Hi @P. Martin

You can always do a cost approach, but you should be able to find enough sold SFRs to determine approximately what the home is worth. If the SFRs are in different types of neighborhoods or different types of houses, you need to adjust accordingly for the changes to achieve an accurate value. Once you do that, you need to subtract out the repair costs to come to a more realistic price. Depending on how bad the repairs are, you may also end up giving additional discounts, especially if the home is only going to appeal to a professional investor.

If you're licensed and still not sure how to arrive at a valuation, it may be in your best interest to hire another realtor to sell the house for you. They should be able to determine the value and come up with a marketing plan to sell the home.

-Christopher