All Forum Posts by: Joshua Christensen

Do either of you (@Dave Rav or @Logan M.) ever look at doing deals out of your area?  What are some of the challenges or advantages you see there?  Thanks!

I'm considering mobile home / RV investing.  I've spent most of my time in apartments and haven't done any parks like this.  I do like the idea of renting land with low maintenance costs though.  What are some of the pitfalls and steps I need to look at to prepare for this type of investing?  Please share your experiences...Thanks so much!  Happy New Year!

Quote from @Nigel Ford:

Im curious to know if anyone is currently finding discounted 2-4 unit properties consistently at all in this time of the market, or if their are any direct mail niches that would work best for finding discounts and/or value add opportunities for these types of properties. If it helps im focused on the Lexington KY market and looking to rent to traveling nurses but it would be nice to get something that’s discounted enough to work for a longterm rental also.

Thank you for your patience with my condition!would appreciate any input.

Nigel

Hey there Nigel, Yes they are out there and take some digging and lots of conversations with folks.  Facebook marketplace, Craigslist, MLS, direct mail campaigns, and door knocking are all the vehicles to find these.  They don't jump up and say, "I'm a discounted deal!"  You have to create them through creative conversations.

Have you done a 2 step close?  Step 1, get the details and the pain points of the seller.  Step 2, Offer a low cash offer, a medium financed offer, a full ask price for owner finance terms (Subject 2).  Give them options.  More than likely, they will take either the mid priced or the full price terms offer.  Rarely do they take the extremely low cash offer, and sometimes they do, so be prepared to pay cash if they do (your own or hard money ready to go).

These deals rarely have anything to do with the market.  They have more to do with the investor and the connection you make to the seller.  They have to trust you, and you can't hard sell them.  

@William Dorrough

Does NY allow owner financing on real estate deals?  These are often referred to as Subject To deals when there is an underlying mortgage.  If there is no underlying, it's just owner finance.  You'll need an attorney to draft the Note and Mortgage if so.  We use title companies for our closings in NM, so they usually have an attorney in the wings to prepare these for us.  I'm not sure about NY, you'll have to seehow your closings are handled there.

I do a lot of these back here in NM and they are a fantastic solution to lower down payments, negotiating terms, interest only options, lower down payments, etc.  No bank involvement until you buy the seller out in a few years on a refi.  

Find nice value add properties and force appreciation through improvements be it physical or cash flow, ideally both.  

On 5+ units these are commercial loans, so you can typically refinance these out of owner finance inside 2 years if you buy right.  

Hope that helps.  

Quote from @Michael Bishay:

Hello all, 

Just wanted to let you know how much I appreciate everyone on this site.  I've learned more here than anywhere else in my time in real estate. 

So I'm selling one of my Airbnb's in Myrtle Beach and will have about 300k to use as a down payment on my next property. Looking to do a 1031. 

Any suggestion on what state to look at?  This would be my first multifamily.  

All help will be greatly appreciated. =) 

Michael

 Good morning Michael!  I hope you had a great holiday and sounds like you're ready to move forward now with the new year going bigger.  Nice.

I'm a big fan of multifamily and there are a lot of factors to consider when looking out of state and out of your area. 

Management and Operations?

Team / Boots on the Ground

Size?

Growth / Jobs & Popluation?

Sect 8 or Traditional?

Value Add or Stabilized?

Have you ever been to the market?

When considering all these things, it is a tough decision to make on the fly.  The reality is that there are a lot of great markets across the country and no one is the absolute diamond in the rough.  There are deals to make money and also to lose in EVERY market.  It comes down to you and finding the right deal where you feel comfortable.

@Francisco Perez

Do you have a deal under contract or are you working to put your first deal together and need this last piece before pulling the trigger.  

There have been a lot of great advice on this forum.  My first KPs came through networking and getting to know people.  If this is a continued problem, start smaller and build some momentum to gain the experience needed.  It may take a minute longer, and it will provide you with the resume to secure either lending or a KP in the future.  

Banks may be more willing to lend on smaller deals to get you moving.  Our first few started with us adding value to other operators deals that they took the lead on.  We filled in other skillsets in the process and tooks much smaller cuts to get our name on some deals. 

Rental rate is key.  Price is king in many cases.  A couple of other options not mentioned...

MOVE IN SPECIAL - Offer some kind of an incentive

LEASE TERM SPECIAL - If you only do long term (12M+) leases, offer a month to month or a 6 month

SECT 8 - How is the area for vouchers?  Although some people have mixed feelings on these, there tends to be a demand for this type of offering and can keep units rented at higher than market rent with guaranteed funds.  

Merry Christmas!

@Stephen Jones that's a great question and one you need to ask a commercial lender.  There are so many different options out there that you may need to talk to a few different lenders to find one that will do what you're looking to accomplish.  

The CAP rate does not affect the interest rate. Rates are set by the banks / Pref Equity Groups / LIFECO / etc. Interest rates are all based on the perceived risk of the deal. Experience of the borrower, down payment, property cash flow, DSCR, etc.

CAP Rate is a calculation of the current NOI / sales price. It is a quick down and dirty to compare properties you want to dig into. Every area has different average CAPS, but the CAP is NOT set by anyone. It is a simple calculation.

Merry Christmas Jorge!  

As always, you make a lot of great points.