All Forum Posts by: Frank Pyle

could you clarify what kind of advice you’re looking for? Are you more interested in:

• Maximizing cash flow while still pulling some equity?

• Leveraging funds for future deals while maintaining a solid cash cushion?

• Understanding the long-term financial impact of different refinancing strategies?

Thanks everyone for the input.  Very helpful thoughts!

Quote from @Stuart Udis:

@Frank Pyle Have you had this construction priced? I don't believe there's anywhere in the US where you can build a 36 Unit 65,000 SF building at $80/ft which is how you are describing the costs if you expect to build this structure for $5.2M. That's where you should start, because I am afraid you are way off with your cost projections. Hopefully you can achieve a higher sell off than $7.9M/$220K/door as well because I don't believe this is a feasible project (your $250k sell off doesn't align with your $7.9M sell off either).

Thx.  We are the developer and builder.  Cost is solid.

I'm looking for loan options for a construction loan.  We are seeking a construction loan for a condo building, with a total build cost of $5.2 million and an improved value of $7.9 million.

The proposed construction involves constructing a 65,067 square foot residential condominium building in 2025, comprising 36 individual units. These units are intended for sale to owner-occupiers with an average sale price of $250,000. 

Key details of the project are as follows:

• The lots, vertical utilities, and plans totaled over $400,000 and are owned free and clear, with no debt.
• Vertical utilities and plans are complete. Permits are in process.
• The project is shovel-ready.

Any suggestions?

Quote from @Michael Velez:

I am looking to connect over coffee with a real estate investor in Indianapolis, Indiana. I am a beginner in the real estate world. 

Hi Michael,  I’m a real estate investor, realtor and we finance investment properties.  My office is in Carmel.  Would be happy to meet.  - Frank

Quote from @David Treat:

What comes next in real estate now that Trump is in?

I just wrote an ebook about 2025.  We are still in a real estate expansion phase.  There are multiple strategies to take advantage of opportunities during an expansion.  To receive a free copy, DM me with your phone number and email address. 

Quote from @Chris Magistrado:

Quote from @Scott Trench:

The input you are receiving from this wholesaler is garbage. Essentially all legit buyers will get an inspection. I will never buy a property without an inspection. 

I don't know any investors who purchase without an inspection, though I hear about this mythical "no inspector" purchaser from time to time, by way of the rumor mill or pompous listing agent. 

Perhaps this "no inspection" buyer existed 2-3 years ago at the height of the market. But no way is this a thing right now in the vast majority of cases.

Yes, this make a lot of sense. As a buyer, I would want to inspect what I'm purchasing. 

Here are some indicators to help you assess a buyer's seriousness:

1. Questions: Serious buyers will ask detailed questions about the property, such as maintenance costs, neighborhood amenities, and property taxes
2. Strong Offer: If a buyer makes a strong offer quickly, it often indicates a high level of interest and intent to purchase
3. Private Buyers: If approached by a private buyer, ensure they provide a Letter of Intent (LOI) and proof of funds.

Quote from @Aj Green:

Hey,

(Posting again as I sign today so it is urgent)

Is there any cheaper lender than a 6.75% for an Ohio investment property.

No brokers fees, 110k, no points, 760+ credit score, 20% down, 140k value, no realtors, single family, rent covers mortgage, 30 year term fixed.

Thanks for the help! I assumed this would be the cheapest out there.

 I’d get that one locked.  

Quote from @Jack Cottrell:

I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.

$140k offer

8% interest rate

20% down

8% management fee

5% vacancy

5% maintenance 

5% cap ex

I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year. 

Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.

I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement. 

Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!

 It’s great to see how proactive you’re being with your real estate investing! Starting with a single-family home in Kansas City is a smart move, and it sounds like you’re really digging into the numbers, which is super important for making informed decisions.

From what you’ve shared, your offer of $140,000 with an 8% interest rate and a 20% down payment seems like a solid starting point. Just remember to factor in management fees, vacancy rates, maintenance, and capital expenditures, as these can really impact your cash flow. It’s also awesome that you’re close to breaking even—many new investors find themselves in that position. If you can swing it, increasing your down payment to 25% or more might help boost your cash flow and make your investment even more sustainable.

Your long-term goal of buying and holding, with a target of 20 properties, is definitely a winning strategy. Many successful investors follow a similar path to grow their wealth over time. Just stay flexible and be ready to adapt to market changes or your own financial situation. Connecting with experienced investors or mentors can also provide some great insights and open up new opportunities you might not have thought of yet. Overall, you’re on a promising journey, so keep learning and adjusting as you go. Best of luck with your first offer!

Quote from @Chris Magistrado:

I'm doing my research and I came across wholesaler who said if the buyer is requesting an inspection, they aren't a real buyer, probably just a wholesaler trying to scope the competition or lock up your contract. 

I'm wondering if there is ever the case where an Inspection is OK from the buyer, and if so, what are some things to lookout for? Or is it always the case that if a buyer is asking for an inspection, to simply say no.

Hey there! That’s an interesting perspective from the wholesaler you spoke with. While I get where they’re coming from, there are definitely situations where a buyer asking for an inspection can be totally legitimate.

Sometimes, buyers want to ensure they’re making a sound investment, especially if it’s a property that might need some work. If you do decide to allow an inspection, just keep an eye out for a few things: make sure they’re serious about the purchase and not just fishing for information, and try to get a sense of their intent. It can help to ask them why they want the inspection and what specific concerns they might have.

Ultimately, it’s about trusting your gut and assessing each situation individually. So, while it’s okay to be cautious, it’s not always a hard no on inspections. Hope that helps!