All Forum Posts by: Corey Jacobs

@Derek Carroll the $90k came from a local credit union that I have been a member at since I was 4 or 5. All my vehicle loans and all my other businesses bank there.  Have a long relationship with the credit union.  The same is true with my partner/cousin. 

We did tell them about the private lender for the down payment. On the initial conversation, we had, he told me that my partner and I both had to come up with the down payment with no gifts of money.  On a side note after our initial conversation we began submitting our tax returns and with those I also submitted the property details including the Bigger Pockets rental analysis calculator report.  He saw the numbers up front and knew how the property preformed at least by our calculations.  Once we got preapproved we talked more about where the down payment was coming from. I threw in there that what if we had someone willing to lend us the money.  He said that would be no issue just he needed to see an agreement between us and the private lender. As long as it worked into the cash flow he was fine with it.  I was amazed at how smooth everything went on getting the loan.  All the back and forth conversations we basically had via phone or email.  First time we actually met face to face with the bank lender was at the closing table.  

The private lender was a family member.  So she was willing to take a bit of risk on us and not require any collateral other than a signed piece if paper with our signatures on it. This answers your question as well @Justin Young not paying her back would make things a little difficult at Thanksgiving and Christmas dinners.. Haha. It goes back to everyone has an unfair advantage and this may be one of ours.  

Going back, don't be afraid to bring up your deals to people... You never know who the next private lender may be.  

@Matthew Gangi initially no. Currently the property is 100% occupied. We intend to over time rehab the units as they become vacant. 

Sure @Matthew Gangi and @Cliff Harrison

Asking Price: $150,000

Purchase price: $120,000

Down payment 25% down total $30,000. We barrowed $25,000 from a private lender @ 3.5% interest only payments.  After credits due to us at closing we ended up only needing around $26,000 at the closing table.  Essentially myself and my partner @Brett Jacobs only needed another $1000 and some change at closing.  

Loan was $90,000 @4.99% over 20 years

Gross yearly rents: $35,892

Expenses: $19,141

NOI: $16,750

Cash in Cash: ~31% 

Monthly cashflow: ~$780 

Thanks @Brandon Hicks for the shout out. I appreciate all the knowledge you have passed along. Im not sure I would have ever had the courage to make it this far with out the guidance and knowledge you passed on to me. 

Wow what a rush. Today my partner and I closed on our very first deal. Took me a few years to get to this deal but glad to have taken the leap of faith. I owe a lot of gratitude to my mentor @Brandon Hicks . He has helped me along the way since the very first time we connected here on BP. His guidance helped me to get over the fear of the unknown. The deal... Older 6 plex unit. Asking price $150,000. Spent a bit of time going back and forth with the seller and the sellers agent to get a seller financed deal. After many back and forth attempts, the seller agreed to finance at $135k with $20k down and 5% interest. Being that the reason for wanting the seller finance option was because we had very little money we could put down, this didn't make sense for us at the moment so we moved on. A bit of time had passed and the property was still for sale. During our conversations, the realtor told me the seller was willing to take $120k cash. At this point we were around Thanksgiving time and while with some family members we were talking about what we were up to. Long story short we ended up taking a commercial mortgage out for $90k @ 4.99% over 20yrs. We borrowed $25k from a family member at 3.5% interest only. Ended up after credits back to us at closing my partner and only ended up having to use a little over $1000 of our own money. Property should net us around $700 a month in cashflow I was like many out there, not willing to take the leap of faith. I don't know what the future has to hold for us, I'm just glad we took a chance. Already looking for the next deal.

Wow what a rush. Today my partner and I closed on our very first deal. Took me a few years to get to this deal but glad to have taken the leap of faith. I owe a lot of gratitude to my mentor Brandon Hicks . He has helped me along the way since the very first time we connected here on BP. His guidance helped me to get over the fear of the unknown. The deal... Older 6 plex unit. Asking price $150,000. Spent a bit of time going back and forth with the seller and the sellers agent to get a seller financed deal. After many back and forth attempts, the seller agreed to finance at $135k with $20k down and 5% interest. Being that the reason for wanting the seller finance option was because we had very little money we could put down, this didnt make sense for us at the moment so we moved on. A bit of time had passed and the property was still for sale. During our conversations, the realtor told me the seller was willing to take $120k cash. At this point we were around Thanksgiving time and while with some family members we were talking about what we were up to. Long story short we ended up taking a commercial mortgage out for $90k @ 4.99% over 20yrs. We barrowed $25k from a family member at 3.5% interest only. Ended up after credits back to us at closing my partner and only ended up having to use a little over $1000 of our own money. Property should net us around $700 a month in cashflow I was like many out there, not willing to take the leap of faith. I dont know what the future has to hold for us, im just glad we took a chance. Already looking for the next deal.

Of the deals I have analyzed I normally get the financials you mentioned above. Just quick and dirty numbers income and expemses.   I plug in their numbers and start analyzing. If it remotely makes sense, now make your offer.  Once accepted now get down and dirty with actual hard numbers.  At this point they should be able to supply actual financial statements for the Property. 

Many mom and pops have not operated as a business. Their little spreadsheet had served them fine over the years. 

My analysis sequence:

1. Ask for Income and Expense sheet

2. Analyze the deal

3. Numbers make sense, make an offer( at this point you may or may not have walked the property) 

4. Once offer is accepted with signed  contract, ask for al financials. Due diligence starts. I asked for last 2 years of financials, leases, maintenance history, ect

5. Re-analyze the numbers 

@Marques Johnson congrats at finding your first property.  More info is needed here. It's an off market property? What strategy are you going for Buy and Hold, fix &flip, or wholesale deal? 

Before finding out if it has liens on it you need to make sure you get it locked up(under contract).  If not while you spend money to have a title search done you may end up losing it to another investor.  

I've also heard that sellers have went to the banks to get an approval to allow a sale via Land contract. Anyone else done this?

Understood, thanks Ben Leybovich New investor trying to learn. Thanks for the input.