All Forum Posts by: Joshua Fulenwider

Does the land come with it?  Or is there lot rent?  Lot rent may kill the cash flow.

@Jack Clough Taxes may seem high.  I found out with my first place in Spartanburg that non-owner occupied places have higher taxes than normal, not to mention property taxes are just structured a bit higher than other states.  The insurance expense does seem high.  I would agree that @Blair Boan should call around for quotes. 

Blair is 7% for management quoted to you and what does this include?  If the company charges you for handling every tenant call or charges a "lease-up" fee you may be closer to 10% anyway.  Maintenance at 5% seems low.

Welcome @Mark Leavitt!

I am an investor and lender local to Greeley.  If you are wanting to sit down over coffee sometime send me a PM and we can talk.

@Sam Rust the state of Colorado has standardized forms.  Real Estate agents are really good at filling them out.  However, the Department of Regulatory Agencies provides these forms to the public:

https://www.colorado.gov/pacific/dora/division-rea...

Check out the contract to buy residential.

I'm from Greeley.  Do you mind if I ask what your plan for the property is?

@Navid Aberg every partner and deal is going to be different.  Some partners may just want to loan you the money and receive interest only payments monthly or principal and interest monthly.  Someone else may not be in a hurry to get paid and will simply want a balloon payment in 6 months or longer.

If you are looking at partnering it is going to be up to you and the partner to set terms.  If this is your first deal or first deal with a new partner you may be asked to give up a greater percentage of the deal.  After you have established yourself you will be able to negotiate terms.  Whether the partner wants a split of the monthly cash flow or is interested in plowing it all back into another deal with you is something else to sort out.

Finding a partner or private lender can involve a lot of negotiation and the terms are only limited by the imagination of the parties involved.

• I would say to prevent a partner from selling to someone you don;t want to deal with you put it in the original partnership agreement (or other binding contract) that you have to approve any replacement partner.
• If you don't have the cash to buy them out, could you find another partner that you like that could buy them out.
• As far as preserving the relationship, this one is tricky and should be handled on a case-by-case basis.  I have had a partner cost me money and jeopardize other deals,  but we remain on good terms.  
• I have not used a financial penalty for getting out early but it is a good idea.  Make sure you set it up in your partnership agreement from the beginning.

Over all I think you need to both be clear on your expectations when entering into the partnership.  Once you have both hashed out all the details put it into a binding partnership/operating agreement.  Then be sure to maintain communication and update the agreement as necessary.  If they start acting like they want to get out of a deal early you should be the first to know so that you can protect yourself and be proactive in replacing them as a partner.

Will it appraise for enough without giving value to the second home?  I have heard of some conventional lenders that can essentially lend on the land and call the other building a shed.

Have you also approached them about calling it a "mother-in-law" unit?

@Monti Harris have you found an answer yet?

If not, where are the houses located?

Due diligence on this may be costly.  A bank may require an appraisal on every property.

@Kirk Porter you may have already found an answer elsewhere however I thought I would give it a go. 

It may be beneficial to talk to a lawyer first to help you define how you want the deal structured.  Then talk to your private investor and see what the two of you come up with for structuring.  Then go back to the lawyer.  

However, it would not hurt to go the other way and talk to the investor first.  Then take the deal back to your lawyer to finalize.  

My preference would be to talk to a lawyer first so you seem prepared and knowledgeable when you talk to the investor.

@Steven Barros 90% on a commercial loan may be difficult to get especially if you are also trying to keep the interest rate down. Banks price based on risk. The lower the down payment the more risk there is to the bank so they like to get compensated for it. That being said, they are not impossible. Really strong borrowers I have seen get financing through insurance companies at 90% LTV with favorable interest rate. This is not available to most borrowers and they prefer looking at larger deals, at least in my experience.

Right now the best I have seen is 80%-85% LTV with a lot of banks being at 60%-75% LTV.

What I think will help you is if you define your geographic region and then cultivate relationships with banks in the area in which you invest.  A lender is much more comfortable lending on a piece of property they can see every day than one across the country.  My experience has been small community banks (typically under $1 billion in assets) are more suited to tailoring products to fit the needs of their communities.

Hope this helps.