All Forum Posts by: Deanna Lawrence

@David Macias I met someone in a class last spring who found a unique niche that you might like. He focused on rentals that were exclusively for active duty military around a nearby base. Apparently there is a shortage of adequate housing for families, or at least there is in his area. I believe he was able to charge a bit of a premium over market rent based on the housing stipend the military member receives. (I may have that wrong.) You may be able to do some arbitrage in this area.

Hi @Jennifer Cooper. My Dad and I did the same thing a few months ago. In our case, we just formed an LLC with me as the managing member. Our ownership % and other details were spelled out in our operating agreement. You can absolutely have a lawyer draw all this up for you, but there are companies that specialize in nothing but LLC creation, usually for a lot less. I used Northwest Registered Agent, but there are others.

Hi @Patrick Tiedeken. That's not much breathing room for you. Are your terms fixed already? If not, I'd try to renegotiate and get him to take back a 1st and a 2nd mortgage and at a lower interest rate. There are a million ways you can structure it. For example: 80% 1st at 3% and a 2nd at 0% with no payments and a baloon in 10 years. What you're looking for is a way to increase your cash flow to a comfortable level. I know people who negotiate deals like this on a regular basis. 

The other part of this you probably haven't even thought of is what clauses to include in the note. You want to have first right of refusal if he wants to sell the note. A subordination clause in the 2nd would also be advisable. That means it would always be in second position, even if you went out and got a new bank loan. There are lots of other things you could add to strengthen the deal in your favor. 

I'm not an expert at this, but there are people who are. Eddie Speed who runs noteschool.com is one. I'm not trying to sell you on his program, but you can get a lot of good, free information on his site.

I hope this help, and good luck with the deal!

If they want you to give them money up front, I'd be cautious. If they say it's for the materials, I'd buy the materials myself. If that's not the issue, I'd probably pass on them. Professional companies have enough cash flow to pay their employees without you having to float them.

Definitely pay them in draws and get lien releases. Your lender may require them if you refi, and the title company will definitely want them if you sell.

Congrats on getting started!

Speaking from experience, $2k will get you about 2,000 oversized postcards. That's at most 2 months worth of marketing. 

I don't know the Indiana market, but if it's like other places I've invested, you won't run into financing difficulty until you get below 50k. 

I have seen a lot of old buildings like that turned into self storage facilities. 

Hi All,

I have an idea for a BIG project and don't know where to start. Up until now, I've only ever done residential investing. 

Is there anyone here who has development experience who would be willing to chat? I need to know what to do first, who to contact, etc... Thanks!

What she means is the condo is "non-warrantable" meaning lenders can't package it up and sell it, b/c it doesn't meet Fannie Mae/Freddie Mac guidelines.

I just bought one of these myself. I got a commercial loan from a local bank. I'd suggest you start calling small, local banks and talk to a commercial loan officer. Don't be surprised if no one offers you a 30 yr mortgage with a low down payment.

You'll be looking at 3/1 arms, 5/1 arms and such with 15 or 30 yrs amortization and 20-25% down more than likely. Your rate will be higher too, which isn't an issue if you know that going in. You just figure that into your expenses.