All Forum Posts by: Austin Fruechting

HAHA! I did wait until the offer was submitted to pour the drink... this time.  

A day with excel forecasting, projecting, and running analysis to optimize a deal are my favorite days. I love this part.  This is why I'll probably never stop even though I'm financially free. 

This portfolio includes: 12 townhouses across 3 buildings.  1x8-unit building.  2x4-unit buildings. 2x duplexes. Renting under market as they sit, and with a little extra polish we could increase rents 25-30% overall.  

Hopefully they respond by tomorrow.  Cheers!

There's 5 very full excel sheets open as I was playing with the analysis. Yes, I am a numbers nerd.

I have never offered a deal to my family/friends that I wouldn't offer to an outside investor - Currently I do have two family members that are capital investors.  They got the exact deal I had structured and already done with outside investors. If you could only get a cash partner at 50/50, why would you give a family member less than you would a stranger?  

I have done a loan twice, and I have never offered loan terms worse than I could from other sources like HML. One of them is right now. Currently, I'm using a $50k loan right now from a family member for a flip I'm doing in cash and I'm giving them 12% APR. If the only money you could get would be at 10% interest, why pay them less than you would pay a stranger?

There are two reasons I treat them like any other investor or money source: 

1. I never want to look back and think that the only reason I accomplished what I did is because my family gave me special deals.  I wanted to make sure it was fully my accomplishment with no special leg up.
2. I also don't ever want them to feel like I'm taking advantage of them and that everything is fair both ways.  

 My favorite!

The biggest part of house hacking is usually the down payment, and then lower living costs.  If you can only get into a property if the down payment is small, then house hack.  If you have the down payment for the property as a normal investment property (20-25% down), then just run the numbers for both options and see how they compare. 

All said and told it seems as though you are saying the monthly cash flow is about the same house hacking or doing a normal investment.  So then you look at the difference in down payment and what else you could do with that money. Then compare again. 

I personally wouldn't request a security deposit when there is none with the current tenant that wants to stay at the increased rent.  That may push her out and then you'll have a vacancy and repairs to do.  

There's plenty of information through books and blogs. 

@Greg H. - I never mentioned rent to own agreement. 

@Joe Fornasiero Ok, then I think a good creative strategy since it won't qualify for FHA and it seems she just wants out is to:

Offer to pay something like $5-10k down and payments of $1500 a month at 0% financing for 24-36 months with balloon payment for the balance at the end of that. Refinance it before that time and iIf it appraises at $300k+ you are easily set. 

Follow up question: does she need the cash or just want out of the properties?