All Forum Posts by: Account Closed

@Nicholas Covington Thanks for the suggestion. I've had a look at the Fannie Mae program(s) but there really isn't any info on loan costs. Do they cap out at a certain price or is the loan cost all relative to the amount finances (i.e. a percentage)? 

@Thripura Vemireddy If you have a particular lot in mind, then the best thing to do is look at recently-sold, 6 month comps in the area to get an idea as to what the price per square foot is. If you cannot find any 6 month old comps then you may consider expanded the area search or going back 12 months - or both.

If you do not have a particular lot in mind, you should consider looking at the most recently sold, newest, similar homes in the area. Try and stick to homes that will fall in line with what you want to build. Comp them out against each other to get an idea what the cost per sq/ft is. It would then come down to getting an idea on what a house in that area costs to build (i.e. $125 sq/ft). You can reach out to a few local builders and give them the comp addresses and ask them to give you a rough idea on how much per sq/ft it will cost to build such a house. Then, you can subtract the cost to build from the average price in the area to get a rough idea on what the land value is. You can then take the land value and divide by the lot sq/ft to get an idea on what the cost per sq/ft should be on similar lots that pop up. 

If you wish to get more accurate, then instead of using averages, perform the same analysis against your comps on a per-property basis to determine what the estimated value of the land is on each of the comps. This would likely help if the lots are significantly larger/smaller than one another because a larger lot doesn't necessarily mean a higher cost and vice versa. 

I'd like to firm up on agency financing and am looking for a clear and concise source to learn from. I'd like to learn more about the individual programs available for multifamily loans (apartments) of $1mm up to $10mm. Also looking to learn about the process in obtaining agency financing, the costs associated with it, and timeline expected to fund. Thanks!

Hi fellow investors - I'd like to firm up on agency financing and am looking for a clear and concise source. Can you refer me to one? I'd like to learn more about the individual programs available for loans of $1mm and upwards in the tens of millions. Also looking to learn about the process in obtaining agency financing, the costs associated with it, and timeline expected to fund. Thanks!

@Reis Beecher I invest in Bossier and in order to be a property manager for others, you will need to be a licensed sales agent and work under a broker who will allow you to manage properties for others. You may wish to start with asking the Gosslee team for advice because they manage properties in the area. Sounds like you are competent enough - just need to make sure legal enough as well. 

@Lacey Burdett As of right now, the program is basically a modified 1031 exchange except instead of rolling cap gains from REI to REI investments you role cap gains from Equities to REI investments, you can also wash away most/all gains over time given the criteria of the program (which has yet to be solidified), and the investment criteria is more restrictive (i.e. location).

There isn't any real, firm rules yet so everyone is pretty much on standby IMHO. 

SFH landlord and flipper here. I am jumping into Syndication with both feet - networking, educating myself and even attending the Syndication Seminar in Dallas the weekend of V-Day. My question is, for networking purposes, what should my business cards say? It isn't like I've actually syndicated a deal yet but I'd like to build my network and need something to hand out. Suggestions?

@Landon Ross Cobb have you checked out the RE360 REI group on Facebook or attended one of their meetings? @Michael Faulk is pretty involved and attending the meetings will allow you to network with individuals who have capital and are looking to partner up. 

Personally, on small MF investments of 5 units and up, a debt play may be the wise route where you simply borrow the capital to procure/rehab the units and then pay a reasonable interest rate to the lender. 

For hard money you are looking at 10-12% easy. Private lending you can probably start at 8 or 9% and, after a deal or two, be able to command 5 to 6%. Also, after you have experience, you may be able to negotiate a lump sum interest payment at the end of the project. However, there are some things to consider here. First, the deal must have enough meat on the bones to support the debt interest. Second, the rent delta between current and market must be significant to command a higher potential future NOI. Third, you will need to focus on 5 units or up as they are appraised based on NOI, not comps. and Fourth, you will need to either 'flip' these or cash-out refinance them with a bank as your exit strategy, the latter of which will require significant added value/equity.

I am a SFH investor in Bossier City. I am starting to move into Syndication so if you would like to connect with me here or on Facebook, just reach out. Best of luck!

@Daniel Brown 

1. You WILL pay twice for title closing and title insurance. This can add up quick. 

2. A lot of people like to brag about getting 80% LTV Cash-Out Refis - but the reality is these are unicorns. Most lenders lend to Fannie Mae guidelines and, for investment properties, will only lend 75% LTV. 

3. The cost of capital can really wreck you. Hard Money is 9% APR, at best, and you can expect to pay up to 4 points up front and another ~$1k-1.5k in document/appraisal fees.