All Forum Posts by: Henri Meli

Great chart @Craig Bellot . Had not seen that before. 

@Davey Davanoski The first think for you to decide is your long term goals and what path you want to take to get there. No, you don't have to self manage. However, self managing will teach you valuable lessons.

@Ryland Boswell I have seen first time investors get approved. And I have seen experienced investors (like myself) get denied for loans. Here is my suggestion.

If you find a property, where the numbers work, then put together a solid business case and visit 5-10 banks and see what they say. Based on their response, you will know what to do next. 

Even if you are turned down, this gives you an opportunity to start building relationships with bankers, lenders and have a file with them. Because when you come back a few years from now, they will already know you and things will be "easier". 

@Derek Gibbs . Congratulations on getting  your first big one. That's what taking action is all about.

Can elaborate on "courting the seller"? Did you do seller financing? I'm interested in some creative ways to do seller financing on deals. 

@Lou Santiago . Have you already written down what your short term and long term goals are? What are you planning to do with these properties? Hold them indefinitely for cashflow? Sell them within a few years after improvement?

@Steve Sprowls . Before signing up to invest, make sure to ask those questions to syndicators and get an answer. If for some reasons , you missed that, definitely ask them again. Some syndications have that information on a portal where you can log in and see it. 

Good luck.

@Joshua Toste . Are you selling the property yourself? Are you using a broker?

One strategy for selling properties is to ask your broker to target investors on a 1031-exchange. These investors have a deadline to acquire the new asset. Sometimes, they are willing to buy at lower cap rate, rather than pay the taxes.

@Andrew Michaud . That's what value-add is all about.

I'm assuming it is $10k per year? Meaning  $833 / month or $200 per new unit per month? Check your math again. I thought it would be higher than that.  But, obviously I don't have all your numbers. 

Could you cashflow better, if you would turn the new units into short term rentals?

@Sergio Fetter . I'm curious about the answer to @Tony Gunter 's question as well. 

@Tony Gunter

@Matt Dabek . What's your ability to close? Can you close a $1M deal  in the next 30 days?

If you can close deals, brokers will send you deals.

You use loopnet to find out who brokers are and get on their radar. 

@Devin Pickett .  Can you still negotiate the price down? I feel you are really paying high price, considering that a good portion of the asset in not producing any income. You are paying the asset at pro forma. 

You will need a deeper analysis of this asset to understand how you can add income and reduce expenses.

Adding income:  Your biggest income generation would be to bring someone in to occupy the vacant unit.  Also turning over tenants and bring new tenants at higher rates and transfer more financial burden to them. Make sure you remain competitive in your offering.

Reducing expenses: Are you planning to self manage? Are you planning to find new tenant yourself (save on leasing fees), if you cannot pass through electricity costs to tenants, can you at least invest in features that will lower your energy bill (LEDs, ... etc). You can do a review of service contracts (Lawn maintenance). 

But tenants paying utilities might get them out of business.