All Forum Posts by: John Whitridge

Hi BP, I am a real estate investor in Philadelphia I've been thinking about some ways to get more involved in the market, one of which was getting more familiar with the data that supports house sales.  A few friends of mine and I were talking and we realized that a lot of the prices we talk about are based on a "hunch" and not necessarily data. 

I'm curious if underwriters have any algorithms or programs that take care of this automatically based on a few inputs or if they largely pull comps manually?  Another way of asking is: is underwriting an exact science or is there some level of uniqueness that each underwriter brings to the table? 

Thanks!

Hey BP, I was wondering what benefits (if any) do Landlords get by keeping Utilities in their name and paying them every month but then having the tenants reimburse the Landlord?  

This pertains mainly to smaller buildings like a Duplex or Triplex but what are some recommendations on how to structure the Utility payments every month?

Hi BP, I recently closed on my first Real Estate and purchased a Duplex in Philadelphia.  It was a great experience and I want to get back into the Real Estate game as quickly as possible and after talking to various investors and brokers deal Syndication came up a lot.  

I have been doing research but wanted to know how deals are pitched to investors from the perspective of a syndicator?  How much of the property value and monthly cash flow do you usually promise investors you are brining into the deal?  And what tips or tricks seems to win over investors who are on the edge about investing in a property?

Thanks everyone for the input I really appreciate everyone's advice I definitely have some more options than I thought which is nice.  

@Matt K. The rents are actually below market rents and have lots of room to be increased to pull in $3500-$4000 a month which would make the deal at or above a 1%.  Even if the rents are not increased it is pulling in a good amount more than it would be costing me and the numbers work well. 

Hi BP I am stuck between a rock and hard place and was hoping someone has some advice or experience in the following situation.  

I had an offer accepted on a Duplex for $350,000 and already went through all the inspections and re-negotiations with the seller.  While the loan was in Underwriting the appraiser did the official report and appraised the property at $305,00.  The property brings in $3,200/month in rent and I had no problem agreeing to the asking price of $350,000.   

After talking with my agent it seems the ball is out of my court and the seller either has to bring down the purchase price to $305,000 or walk away from our agreement.  What can I do to ensure the deal doesn't fall apart? Is it possible to get a second appraisal?

@Everett Fujii

That is incredible advice, we have reviewed a lot of the things you mentioned but definitely will need to add in some more to make sure our bases are covered.  If you do think of anything else please post it as they come to mind! 

@Everett Fujii

That sounds like it's a common occurrence and I'm hoping to learn from everyone else's mistakes before making them myself.  

We are both putting money in but he is putting up ~75% of the contributions and then we are splitting the profits and expenses 75/25.  My role will definitely be more hands on but we do plan on using contractors for repairs since I have no construction experience.

Whatever other advice you have I would really appreciate hearing it!

Great points to think about, we have talked about a lot of scenarios and are working getting the exact terms of the partnership in writing from both parties.  I will make sure to specifically outline the points you brought up though, greatly appreciate it!

Hi BiggerPockets, I am looking to finance a deal for a single family home through a LLC that I am setting up which seems pretty straightforward. I am using a hard money lender but do not have all the money myself so I am looking to bring on a partner to help finance the deal.

Based on the research I have done so far it seems like the easiest option is to pool our money together under the LLC and have the LLC take the hard money loan. Is there any advice or pitfalls to be weary of when doing something like this? Or is there a better strategy to pooling money together for a loan?

Looking forward to hearing some great advice!

@Jaysen Medhurst thanks for the response! They keep the CapEx items separate from the Repairs and Maintenance totals but have not provided a specific breakdown of the repair costs yet. Hopefully it is not anything major but $60k sounds like it has to be something major.

@Robert Ellis that sounds like a great, I would love to hear your opinion I will send you a personal message. 

I appreciate the input everyone.