All Forum Posts by: Gideon Sylvan

Is the issue financing the improvements and down payment or financing long term?  With $6,000+ in monthly revenue you should be able to get a long term commercial loan.  I've never done this with commercial, but I frequently use hard money during the improvement period and refinance to a long term loan.  I would talk to a commercial lender first, but in theory you should be able to improve the units with a bridge loan, generate revenue, and get a commercial loan based on it's new value as an income producing property.  

In my experience, flipping is a great way to go if and when you have a great process.  I bought several rentals before my first flip, and I felt like I could have waited to improve my rehab process quite a bit more.  

That being said, the process is never perfect, and to some extent I wish I started flipping sooner, since a well planned acquisition is hard to lose more than time on. 

One thing to consider is your acquisition area; are you planning on flipping in the same location(s) you're buying rentals?  If so, maybe keep playing the rental game until you score what pencils out to an undeniably good flip.  

I use Ian Morrell ([email protected]).  Super knowledgeable, super helpful, and a pleasure to work with.  

I haven't used them, but I hear only good things about Andy Park (Double Haul Capital) and Fred Rae (Rain City Capital).  

What is his criteria and what are his goals? 

There's a decent chance that everything you found is not ideal, simply by the fact that it's still for sale. A good deal will go fast as multiple parties compete (especially in an active city like Houston and with a property class that is owned by investors who also want to maximize profits), so rather than focusing on finding the perfect deal, find every deal where the numbers work and write offers as competitively as he will go.

A good investor (i.e. the kind you want as a client) should make an offer on anything they can afford that pencil's out.   

To work this strategy, look at and run the numbers on every multifamily property that hits the market (at least once a day).  For every opportunity, look at the cap rate; if it's good verify it with your own numbers, which includes researching current rents (high rents with high turnover can be a trap, and low rents can be an opportunity to buy a discount); if the numbers are still good, send it to the investor.  Your goal here is to be the information provider, not the salesperson, since a good deal will often sell itself. 

With this in mind, there are casual investors who will be happy investing in a stale offer if it is cash flow positive (i.e. profitable after all costs, including maintenance, projected vacancies, and property management), and there's nothing necessarily wrong with that.  Hence the opening question: what is his criteria and what are his goals?  

I don't think I've ever acquired a property that didn't have surprises.  In general, it's helpful to budget for unknowns.  That being said, the past is the past, and I would focus on your exit strategy.  There may be a legal opportunity here (the big one being what Steve Vaughan described), but keep in mind the holding cost clock is ticking.  In Washington (which I understand to have similar real estate laws to California), inspectors are only responsible for what they can see; sellers are only responsible for what they know (when disclosures are required); and agents are paid to negotiate and transact sales.