All Forum Posts by: Joel Florek

@Meredith L. Thanks for the kind words! I wouldn't necessarily say scrambling is the right word. Even those using a traditional down payment can end up jumping between banks and running into issues. Just a nature of the game. I am just financing the deal in an unconventional way that only a small percentage of banks have experience working with. I do make the sellers aware I have banks lined up ready to work with the structure I am proposing and have experience closing similarly structured deals in the past. All of which helps to make them more comfortable with the proposal. 

@Varun Parkash Let me know how I can help! Love seeing others succeed in this game. 

Does the backyard of the property still look like this? If so I would assume this is one of the big turnoffs for buyers. Where is the yard and do you have any outdoor privacy? For myself and many of the people I have gone to look at houses with this is something we care about. Not everyone does, but I would look at your comps and see what exterior amenities are offered to go along with the house. 

Same deal with rentals. If I am looking at buying a property I cant just compare a 2bed 1 bath 1000sq/ft and say we should have equal rents. If the competition has in unit or onsite laundry, car ports or garages, porches/decks, a pool at the facility and other items I may have a difficult time getting comparable rents as long as they still have vacancies available. But if I am the only game in town at the time I have renters looking I will probably the comparable price point to the guys with more amenities. 

@Sandro Hagenbuch I am always 100% honest about my intensions when working with anyone. I have found it to be the best policy. With that said yes, I did let them know I was looking to see who could provide me with the loan package I was seeking. If your not shopping you loan I feel you arent doing your job as an investor. 

With respect to timing it has to do with a couple of factors. First and foremost you are looking to get approved by their underwriting. They will then send a letter stating what terms they are offering. You can negotiate on some of these terms and usually there is a timeline to accept. You are also looking at your desired closing date and determining how much time the appraiser needs and anything else required prior to closing. 

Sounds like a tough situation you got in. In my initial interviews with banks to see if they can work with my deal structure I ask them what their process is for underwriting deals. Typically the banks that say they can get it done in a few days I havent had luck with when getting creative as they underwrite the easy deals quickly. But give them all the ammo they need to underwrite the deal and generally I have experienced 1 to 3 weeks. Sometimes, depending on the size of the loan request a board approval is required which could delay the process further depending on how often the board meets. 

@Kimberly Daniels @Wes Woodhouse @Ian Walsh Thanks for the comments, much appreciated! 

@Matt Eckler thanks for the kind words! Its been an awesome journey and the freedom it has given me in my life is amazing. Would love to connect and learn more about what you are doing and where you want to go! 

@Chaithra Kumar Thank you very much, reach out and PM me. Happy to chat! 

@Account Closed I self manage my units but you still need to account for the expense so I always do a minimum of 5%. As I grow I will hand over the virtual management duties(90% can be done via phone, internet, and mail) to an assistant and get a broker lined up to do showings based on a fixed rate price to show a unit when needed so I am confident I can put together this structure and meet or exceed the 5% target in the future. In total I maybe spend 3hrs a week for the portfolio on management related duties that a property management company would do. 

@Will Sellenraad exactly. Pick your favorite, I have found Realtor.com to be the most accurate and I get the alerts there first. I do have alerts on all the platforms though. While I love the idea of having a great agent or broker helping to be on my team finding deals I have yet to meet a broker that has brought me a deal that I havent already seen. Generally I always work with the listing agent. 

@Vincent Mazzuca Happy to help! 

I have heard your story from many banks. It is definitely the norm. However, I have been able to find in about 10% of the calls I have made to banks that they will look at a deal of this nature. This is why I have had my first choice bank fall through in underwriting in both deals where I had a seller 2nd but had a backup that could close the deal. 

My way to weed through banks is to ask the following. "I am calling to inquire on getting a commercial mortgage to buy a multi family property of xxx units. Currently I have xxx units in my portfolio and am excited about this new property I have under contract (or am considering making an offer on). Understanding your time is valuable I wanted to see if you might consider working with the deal structure we are hoping to use on this deal as I know for many banks it does not fall within the traditional box they are allowed to work within. I am looking for a bank to carry 75% to 80% of the purchase price in 1st position, and have the seller carry a small 5% to 15% 2nd position note on the property. Going through this process to close a similar deal I know this does not fall within most banks box but do you think might be a loan your bank would consider reviewing? If so I have a detailed information packet I put together on the deal that provides a background and financials on my current portfolio as well as a personal financial statement." 

Saying something along these lines allows me to get to the point and within 5min I can usually rule a bank in or out to get to the ones that want to talk more. So far it has helped me and I have done this on two deals in different states with different banks. My assumption is it can be done anywhere.