All Forum Posts by: Jared Rice

It has come to my attention that there are two distinct routes to travel when seeking an agent in a small town. 
- Pick the agent who lives in the town and can generally help you with trends and market information
-Or- 
-Pick an Agent from the local big city (In my case Fort Wayne) which has the advantage of having done more deals and knows more pitfalls of the deal process and what to look for to make it an even better deal.

Which is better and why?

If Real Estate is "Location, Location, Location" than shouldn't the small town realtor have a competitive edge? but what if they cant get the deal done? or be found in the first place? Thoughts?

Following Scotts advice posting my thesis with the hope that I will receive community feedback. 

Goal: STF- 12 doors; LTF 1 Billion AUM or 83 Units

Thesis: Indiana is an up an coming real estate market. We saw a massive increase in population during covid. My idea as to who came is mostly laborers, because the median income didn't move at all and it trickled off immediately after the covid boom. This has made the blue collar workforce demographic even stronger. With home ownership being statistically more unachievable than every before in US history, this has made these people have an incredibly difficult time finding housing. Most Smaller industrial towns don't keep vacancies if they are marketed properly. Also the YOY wage growth has not pace with inflation making low income even better. Target cheap BRRR and Manufactured homes, use these to provide a basis for me to get into new construct multi-family (4-Plex), and BRRR Multi Family, I will enter these into the market as the supplement to the mid level and place them on the side of my small city that is most adjacent to the big city, to try and tap into the people in the affluent part of the city.


Resources: Very little cash (10k), decent financial network.

Strategy: Manufactured -3BD 2BT for 60k after rehab Rent- 1000
Single Person Unit- $650
Family $750
Goal 1.75% deal

Duplex-  (2) 2BD 1 BT - $75,000 = 1 Family Unit & 1 Single Unit $80,000 = 2 Family 85,000

$37,500 Per Single Unit   $42,500 Per Family Unit

4plex all 3BD 2 BT after rehab under 175,000.

I see lots of bigger pockets in the Midwest aiming for over 2%.

Depending on the bank, yes this is something they do but you will have to have income/assets to prove you can manage the debt, before the deal in order to justify getting a loan in that amount. If you have the assets/ income to prove at a bank then chances are that you should stay there, or use the same assets as collateral for the private lender.

It is my understanding that a private lender would be easier to obtain financing but more expensive, so that decision is yours. 

If you find a private lender I would, *ask lawyer* do as follows:
-Start an LLC for the Acquisition of said property
-Have them Contribute 500k for 6.25% of the business. (500,000/8,000,000)  *so it can be any number proportional to the portfolio value
-Use said money to purchase properties Inside of llc 
-You both now have liability protection and they have an equity percentage representing the value of their investment.
-for bonus point you make sure to put an some sort of buyback document or clause in place for a future date to make it so they do not overstay their welcome.

Potential drawbacks is that the private lender would then be entitled to YOY appreciation as well and if you don't have the buyback in place before they could be annoying and squeeze you for the appreciation + Interest.

* I own 0 property, this is just my general understanding I hope it can at least guide you somewhere. Also LLC law is slightly different in TX.*