All Forum Posts by: Greg Scully

@Shawn Singh - There are some variables to the scenario that I can't account for: interest rate and amortization.  I did this as a loan to cost scenario - the 100k would be included in the purchase price and 25% down would be for 950k all in.  Keep in mind the turn over time to bring the units up to market rates.  You'll likely have leases to honor and may not be able to turn everything over for some time.  I used your new rent roll beginning in year 2.

A very quick analysis shows a 2.86% return over a five year hold with negative cash flow during the first year. I did assume a conservative 10% vacancy.  The expense ratio seems a little low at 44%.  At 50% expenses this deal is dead.

It seems thin at best at that purchase price.  Their maybe some room for it to improve with the correct financing. Agency debt (Fannie Mae or Freddie Mac) can have some very good terms, and perhaps the rehab money could be interest only.  Hope that helps.

@Thang Nguyen - Finding them on the MLS is going to be tough. It sounds like you may be starting to reach out directly to owners (your Craigslist reference). That may be your way to find these higher CAP rate deals. I would suggest driving for dollars. Pick an area you'd like to invest in and look for what appear to be Mom and Pop sellers. Typically they'll have the hand made "for rent" signs, if you call them, the owner might be answering the phone.

In addition to Craigslist, look for potential Mom and Pop owner on Facebook Marketplace.

@Ismael Reyes - Congratulations.  That's a big step to growing your business.

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@Amanda Williams - Check your local tenant/landlord laws and possibly talk to a lawyer.  If you are inheriting leases, you'll likely have to honor them.  If they are month to month than you'd have to follow local eviction laws which may add to your holding costs.  Some tenants can be very savvy about the eviction process, so you may want to have counsel about the worst case scenario.

@Jonathan K.- You may have to use some kind of national lender for investing out of state.  Local banks and credit unions may not lend for out of state properties.  I used NewRez for properties in TN.  Pretty good experience. I've heard good things about Ridge Lending as well.

@Ricky R. - I use the Michael Blank SDA and think it's extensive enough for modeling a purchase with or without syndication.  I'm a little surprised that @Chase McArthur thinks it's only suitable "to help you decide whether or not to submit your LOI for further diligence".  There is a quick calculation tab for a ten minute analysis but it is capable of far more than that in my opinion.  I've also taken some of Justin Kivel's courses on Udemy, they're definitely worth a look.

@Franklin Marte - You may want to look into first time home buyers options through FHA. You can get into a property for 3.5% down. Maybe you can house hack a small residential multi-family to help get more capital and gain credit and investing experience.

@Teri Feeney Styers - Thank you.  That's a great solution.  

We are trying to scale our flipping business and are looking to use a local person to handle the back end logistics, records keeping and general project management from the administrative side.  For those of you that use an assistant, how do you pay them?  Hourly, flat fee or equity?

Would something like 2% equity or $500 per project be reasonable?