All Forum Posts by: Dustin Smith

Hey all, 

I've got a 20 unit apartment I'm looking at 2 blocks from a major university.  The listing was pretty vague, but I've dug around and gotten some of the background information on the property.  I've come to the conclusion that it was basically an apartment flip.  The owners purchased it, rehabbed it, and are now selling it.  From what I can tell, everything looks good, if you overlook the fact that there are currently no tenants in the building.

Is this an automatic deal breaker? The building is a FSBO, and they're offering owner financing, so I imagine there is some flexibility in terms of actual payment schedules.

Thoughts?

@John Conn the problem with wholesaling is you can't go on comps. The comps only tell you what the property should be roughly worth fixed up. You need to understand the basics of what it will take to bring it to liveable and how much it will cost. Like @Cornelius Garland said, check out the Ultimate Beginners Guide. That will get you on the right track. There's a full chapter on wholesaling if I remember correctly. 

Best things for a new wholesaler. 

1. Build your real estate/wholesale education

2. Drive around and find properties that look distressed or vacant and get information on them

3. Return here and ask specific questions

@Scott Rowsick as a basic member you can check out the marketplace.  You just can't post.  I'd head over there and see what posts look like, whose commenting, how often new posts are added, etc.  Keep in mind that a lot of the contacts from a marketplace ad will be done in private, so you can't see them.  I haven't tried to check any analytic data on them, but I'm sure you can.

@Griffin F. @Scott Rowsick Quick tip, sometimes if you sign up for a BP webinar, they will offer sales on a Pro membership.  @Kyle Penland I started feeling bad taking in all the information around here for nothing too! I own several REI books and everything in them I can find free on the site, with more detail and more personal examples.

Ditto to @Neil Schoepp in addition to those, being able to post on the marketplace is a big one.  You can create ads for financing, if you have a property for sale or are looking to buy a property with a specific guideline, etc.  The perks are great.  Discounts on all sorts of stuff.  My personal favorite is 30% off Wix websites, which are awesome by themselves.  A really nice thing for me is being able to use the calculators unlimited times.  If I have a property that I want to pitch to a potential partner or investor, I run it through the calculator and it spits out a pretty presentation ready copy with pictures and numbers to satisfy anyone.  

However, I will say it's worth spending the time to make sure you're comfortable with yourself as an investor before going pro.  Especially with the calculators, it's way too easy to get excited about a property because the calculator says it's a good deal.  You should know if it's a good deal and why before you plug it into the calculator.  

On the flip side of @Kyle Gregg if you have taken the time to get a good support team together and have a good, reputable property manager, they can handle everything about the daily operations of a larger property.  As you start getting more comfortable with the responsibilities of property management, you can start taking over responsibilities, while still having someone there to keep you from crashing if something goes wrong.  If you budget about 10% of gross rent for property management (which you should anyway) you will be able to afford a good management company.  I personally just assume bypassing the small properties if large ones are an option for you.

And that's the mentality that makes it America's best kept secret. 

@Jon Klaus 

Its a 100% finance for the purchase price. I don't think he is requiring a personal guarantee. My mortgage broker says d he would have no problem lending on it, especially since it shouldn't cost more than $350k total to buy and convert and a super conservative investor would buy it up at $500k without question. 

I'm planning on refinancing into a commercial mortgage once the project is done, high my broker is in board with. Also, I'm hoping I can convince my contractor to take a down payment then hold the remaining balance until the project is finished and I'm looking to get a project loan from home depot that will help spread the cash requirements to the end also.