All Forum Posts by: Jamie Parker

Thank you. 

I’m updating my profile, this was in 2016. Thought it would post with the dates . 

Investment Info:

Other buy & hold investment.

Purchase price: $3,000
Cash invested: $3,000

Vacant Lot

What made you interested in investing in this type of deal?

The city is changing the zoning in the area. Plan is to purchase multiple vacant lots for future development.

How did you find this deal and how did you negotiate it?

Land Bank Property

Investment Info:

Other wholesale investment.

Purchase price: $57,500
Cash invested: $100
Sale price: $90,000

Small vacant lot, overlooking I-40 on the westside of Nashville

How did you find this deal and how did you negotiate it?

Direct mail to this address for 8 months. Spoke with the seller a few month prior to contracting. Just before Thanksgiving the seller was ready to talk. The negotiation was: seller wanted 65, I wanted it at 50. Split the difference, 57,500.

What was the outcome?

Wholesaled to a builder to build a house.

Lessons learned? Challenges?

Leave some on the bone for the end buyer. A year or so went by and I wondered did I leave enough room for the builder. The city required the road to be extended a few feet, along with water and sewer.

Investment Info:

Single-family residence wholesale investment.

Purchase price: $255,000
Cash invested: $100
Sale price: $260,000

3 /1 894 sqft

What made you interested in investing in this type of deal?

The property is in an evolving area with an overlay for Detached Accessory Dwelling Unit.

How did you find this deal and how did you negotiate it?

Cold Called the seller. The seller had an offer for 250k. The seller wanted to get 300k. I informed the seller that because of the overlay, the property may be 2 build eligible in-spite its small lot size. When under contract at 300k with the expectation that codes would be the determining factor on what can be done on with the property, as it relates to new construction.

While the property was 2 build eligible, due to the lot size, highest and best use would be to rehab the property.

Lessons learned? Challenges?

Lessons learned are related to the title process I use with sellers and buyers. I gave up time with the expectation that the buyer would be able to close sooner. The time allotted on the initial contract was ample time for the buyer to close. I was eager to get one on the board and moved the dates up a week. That move created frustration on my part and the seller and had to amend the original contract.

Do not get eager for the close. Allow things to play out, unless the buyer closes sooner.

Investment Info:

Single-family residence wholesale investment.

Purchase price: $255,000
Cash invested: $100
Sale price: $260,000

How did you find this deal and how did you negotiate it?

Cold Called the seller. The seller had an offer for 250k. The seller wanted to get 300k. I informed the seller that because of the overlay, the property may be 2 build eligible in-spite its small lot size. When under contract at 300k with the expectation that codes would be the determining factor on what can be done on with the property, as it relates to new construction.

While the property was 2 build eligible, due to the lot size, highest and best use would be to rehab the property.

Lessons learned? Challenges?

Lessons learned are related to the title process I use with sellers and buyers. I gave up time with the expectation that the buyer would be able to close sooner. The time allotted on the initial contract was ample time for the buyer to close. I was eager to get one on the board and moved the dates up a week. That move created frustration on my part and the seller and had to amend the original contract.

Do not get eager for the close. Allow things to play out, unless the buyer closes sooner.

 
Point taken. I had a bad understanding about how an out of state investor would “choose” a property. Every property up for consideration gets a visit. At least 1, maybe more, to the full scope of what’s for sale. Thank you for clarifying that for me. 

Investment Info:

Single-family residence wholesale investment.

Purchase price: $220,000
Cash invested: $100
Sale price: $225,000

Wholesale: 2 build property to a Developer. (should have documented, dates may not be exact)

What made you interested in investing in this type of deal?

Starting out as a wholesaler appeared to be the best place to start in Real Estate for me. Understanding what a good deal looks like.

How did you find this deal and how did you negotiate it?

Door Knocking for 3 months. The seller wanted to purchase another home with the proceeds from the sale of this one. The pain point was that the seller grew up in the home. Parents and sibling died in the home. Moving on was tough, but helping him make peace with that was main part of the negotiation process no one else touched on.

What was the outcome?

Builder tore down the single family and built two single families on the lot.

Lessons learned? Challenges?

Negotiations are for discovery and are not always about price.

 I'll take your word on it. 

 So basically its a "warm and fuzzy" about a property. Obviously the numbers HAVE to work. The technicals (migration rates, job growth, tax situation, debt cost, etc) to work as well. We are talking, underwritten properties that pencil out.  All things being equal.  If there is a choice to be made, it comes down to what an investor "likes" or prefers about one over the other? 

Additionally in terms of a GP/ LP relationship, would preference of LPs create the same dynamic in choosing one GP/Sponsor investment over another, if all technicals and numbers are the similar between two investment? Or are LPs more concerned about the technicals vs the warm and fuzzies? 
 

No, I haven't. that why I'm asking the question, my good sir. I have referred a loan out of state based on NOI, cap rate at purchase, room for increase income and purchase price vs market value.

Maybe I didn’t articulate the intent of the post as clearly as I hoped

For anyone who has bought multi family out of state, “what are gives you the warm and fuzzies about a deal”:

Obviously not cap rate, but maybe vacancy rate, Cash on Cash ,GRM, IRR, Unlevered free cash flow, Cities over 250k? 150k? 50? LIHTC eligible, opportunity zone, STR eligible, property management in the area….

Pretty decent list. didn't know where to start so I figured I would ask the more seasoned of the bunch. Plus I recently got a brand new calculator, wanted to see what out of state investors though the most important aspects of deciding between to similar rates cap rates in 2 varied size apartment.