All Forum Posts by: Deb Somdahl

@Myra Vogt, sorry I am weighing in late. Mat Sorensen wrote a book on Self Directed IRA that you can find on Amazon. I am doing some research right now too for a good custodian for an existing Roth I have from previous employer. Last year I opened a Solo401K for my LLC (as Scott Dixon did) also with mysolo401K.net.

@Taj Hayden - Not sure the level of involvement that you want, but if you work full time and want to take it slow/learn etc another option not mentioned would be a Note. I'm sure your local REIA will have several connections if you are interested.

@Jeremy Henry A few things that might be worth your consideration:

1 - Are all 5 in the same area? If the area is in decline, there may be other properties facing foreclosure. Have you talked to your lender to see if there is any relief they can offer? Is your rate decent?

2 - You mentioned you aren't upside down on them, so another investor may want to buy them. Even though you are frustrated someone else may be willing to take on. This may not be the big payday you sought - but it is sure better than destroying your credit/feeling like a failure.

3 - If the properties need cosmetic updating in order to sell, you may consider a JV with an investor or contractor who can initially cover rehab costs, it there is a margin.

All in all, you sound tired. Having a fresh set of eyes could greatly benefit you if you are willing to share more information with someone who can help.

@Jeff Kehl @Jim D. thank you for your comments!

@Luke Myers

Thanks for your comments.  I won't make an offer if numbers don't work.  

I will not be able to build capital funds quickly enough through rent charges  to handle these expenses - so am seeking advice on how others have handled similar situations (the resolution of the large capital expenses) upfront, during the sale - and the impact of one way v. the other.

@Account Closed

Thanks for you comments. Seller is older and that is extent of what they would do, time-wise. I only have one year of self employment so need to partner on this deal or seller finance.  

Congratulations, Shiloh.  Thank you for sharing!

What a great transaction, especially with the $30K option fee! I'm curious how you captured the buyer? (Advertising a rental? Neighbor? MLS listing?) I was in MN during your last Meet Up. Hope it went well.

Deb 

@Paul LaSpina upgrading my BP membership for the evaluation tools was worth it for me for newbie analysis of multi-family.

Ask for the operating expenses from the current owner/seller to complete an analysis to see whether the numbers work for you. Some info you can look up (like taxes, local rent rates, etc). If you are not doing improvements, just use your offer or sale price as ARV. The template will prompt you on what factors you should consider (that the owner/seller is NOT mentioning - like big capital improvements like HVAC, roof, etc).

What I like about the tool is that I can run information with variables to see the impact on cashflow, return on investment, etc.  It will also show "rule of thumb" metrics  - even if the info doesn't always apply in your market, as pointed out.

I am looking at a 4-plex investment. It is built in 1985 and has an original roof, and 2 original A/C (so two are likely ending useful life). I am weighing making a lower offer and planning for these large capital improvements in the near future by setting aside funds, or paying a higher amount and asking for repairs or some sort of concession from seller. Any thoughts?

Seller is open to owner-financing (which I am hoping to negotiate) so I would have to sell or re-fi in next 5 years, so am thinking about how this factor plays in. There may also be more room for creative solutions.

I am new to multi-family analysis. Any insight you can offer is greatly appreciated.

HI Paul!  Welcome to BP and congratulations. It is awesome that you want to get started educated and investing early! I went to Jefferson, and used to live in Goodrich Circle very close to the school.  I moved out of the cold just over 2 years ago, but spend time in your neck of the woods in the summer.

If you are not a member of MNREIA, you should consider attending - at least once to see what it is like. The meetings are in Minneapolis. This is a good opportunity for contacts and educational opportunities.