All Forum Posts by: Damon Pendleton

Tom are you saying you’ve seen property owners with adequate insurance get a judgment against them for a personal injury case and then that judgment is placed it against the property, or as an operation of law, it serves as lien against the property?

In every instance I’ve seen as part of any settlement with the Insurance company the plaintiff will have to sign a release of all claims which would prevent the attorney from doing as you suggest. Can they, maybe if the owner doesn’t have adequate insurance, but the likelihood is extremely rare if adequately insured. 

Attorneys who represent inured people look for Insurance not equity in real property. Even if an attorney got a judgment in that situation, they would have to turn that judgment into a judicial sale of the property in order to collect, which would be a nightmare. Also, if there's a mortgage at all, an attorney wouldn't be privy at the outset on whether the property owner were leveraged 90% or 10% LTV.

The only time I see this remotely being an point of concern is if there were horrific injuries and the owner had grossly inadequate Insurance (which should never be the case). 

Amir-you are paying too much. As Vic already mentioned, this might work for cash buyers or 1031s but if you are financing with investors then you have to find a better deal. That’s why often you’ll investors taken on when it’s an underperforming asset with value-add opportunities.

Maybe think about finding a syndication group with a good track record and investing in a project passively as an LP so you can see how the deal is done. 



Originally posted by @Amir Khan:

@Joel Owens @Damon Pendleton thanks for your responses. 

Damon yes, you're right about me not accounting for debt servicing. So if most (or all) of it goes to debt servicing ($1.76 million at 5%= $114K yr), how are deals like this ever put together? Would investors ever be interested in only investing for profits at exit strategy?

Joel lease term is 20 yrs ending 2027, this is large national bank with solid deposit history, 4 x Five (5) Year Options, 10% Increases at each 5 year option. Great location in a large DFW area city, just off busy interstate highway.

Your assumptions are incorrect because you failed to account for debt service. If you give $11k back to each investor then what are you paying the $1.8MM mortgage  out of? 

I wouldn't say it's normal, but it's not unheard of. There could be a host of reasons as to why. When I get those request I let my agent know to tell them I'm a serious buyer that will close IF I like the property along with POF. Otherwise, I don't care for the tactic so I tell them they can keep it and move to the next one.

@Cristy George everyone has different investing criteria and motives. I’m focused on cash flow and value. That property doesn’t generate enough cash for my criteria so I wouldn’t buy it (at that price at least).

Are you sure about the spelling and the location? I'm familiar with Petersburg, VA near Richmond but unfamiliar with a Petersburge near Blacksburg. But I hear new cities all the time so maybe I'll learn something today.

I’m no expert but I always thought it was a wealth building vehicle for the syndicator? 

Try a larger firm that does corporate formations and has a litigation arm. The litigation component is important because that’s really where your operating agreements get tested. 

What size deal are you trying to do? I’ve never done anything $20MM+, but in my experience up to a few million there really isn’t a big difference. Speak to several lenders, get their terms, come up with the money, close. I’m oversimplifying, to an extent, but it’s really not that complicated, especially when you’re adequately capitalized.