All Forum Posts by: David Lilley

@Chris Mason maybe in the residential realm; definitely not in commercial.

@Taylor Tomaso you are going to pay a 1% fee if you use a mortgage broker. You can find an endless amount of lenders who offer FHA loans and their rates will pretty much be the same. No sense in paying 1% for a product that easy to find.

@Bill Snyder the previous owner didn't put much effort into it. The marketing was limited to a banner out front. No website, no ads, and it didn't even show up on google.

@James Perdomo yes this is our first self-storage deal. We are going to add covered and uncovered parking. There is also 2.5 acres of raw land that we can develop into more storage units or multifamily in the future.

@Taylor L. yes, knowing the low occupancy was going to influence the ability for a buyer to secure debt for the property, the seller was prepared to offer to financing. 

@John Vanhara loans over $1mm will be Freddie and Fannie Mac. Best bet with smaller loan amounts will be local credit unions.

Investment Info:

Other buy & hold investment in Caddo Mills.

Purchase price: $1,350,000
Cash invested: $500,000

Contributors:
Dane Ohlen

262 unit self-storage facility 21% occupied at acquisition. We will stabilize the occupancy over the course of two years and add RV and boat storage. Projected 19.7 IRR over 10 years.

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

Ability to quadruple NOI by increasing occupancy to market levels.

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

Industry contacts. Negotiated seller financing at 80% LTV 5% interest only for 2 years.

How did you finance this deal?

Seller financing at 80% LTV, 5% interest only for 2 years.

How did you add value to the deal?

Increasing occupancy

@Account Closed be sure to checkout Appfolio. Like Juniper Square, but much cheaper from what I hear (approx $500 a month).

@Andre Jernigan focus on 2 or 3 specific target markets. Compile a list of brokerages in those areas and check their websites daily. Sign up for all of their email blasts and underwrite every property they are marketing. During the underwriting process, you will surely need to call the broker for specific questions you might have. Doing this will begin to establish a relationship with those brokers.

You don't necessarily need a broker "on your team", but you do need to develop a rapport to help with your image as a credible buyer. With any offer you submit, the broker will communicate to their seller whether they think you are a closer or not. 

@Shubho Ghosh reach out to @Dane Ohlen he is a GC and does a ton of rehabs! 

@Maya S. anything with that high of a yield will most likely be in a bad area. I highly doubt you will find that kind of cash return in Miami or California; I would adjust your criteria. Find a property in a good area in Az, Tx, or Fl with a cash return of greater than 5%.

We are selling a 16 unit in Az right now and will be 1031ing as well. If you are open to a TIC let me know. We will have around 800k of capital to roll into the next deal.