All Forum Posts by: Joseph L.

@Sandy Fiser, @Brilliant Clayton. Please see Robert's post. It's my go-to tool for getting owner information.

Tony,

Check your inbox

Here's an exterior update guys.

Hello @Sandy Fiser,

The good deals are hard time find in my opinion when you are just starting out. That's because you usually have to go through so many deals before you get an idea what a good deal is suppose to look like. With that said, having relationships and being diligent is key. I remember purchasing my first investment property and paying too much for it and doing an extensive renovation on it at that. This was a very stressful process for me considering it was my first property. For someone starting out on their first deal, I don't recommend doing a complete renovation unless you have reliable contractors or have some sort of prior experience.

I would of chose a small multi-family property that need very minor repairs (which this type of property ended up being my second purchase). From the lessons learned on my first property, it took me forever to purchase the second property because I had a very specific criteria while relying on only 1 source for deals (MLS). I had some deals fall through due to not moving fast enough while others didn't get past initial negotiations. After looking through many deals and making tons of offers, I finally was able to close on a second property.

So while looking for my third property I knew I had to try something different in terms of marketing so I ended up discovering direct-mail. This allowed me to negotiate directly with the seller and avoid middle men. This was a great experience as I was prepared to negotiate and didn't let any emotions affect my final offer.

Hopefully this helps.

Also, I have active contracts out on flooded property; 1 in particular is located in good area in Denham. I was able to get a good deal on this property considering the events that have taken place. There's a lot of risk associated with this deal but those were considered in my offer. I have a team in place ready for a project like this so it would be a great investment to build my portfolio. As I mentioned in other posts, these will be the last single family properties I pursue as I'd like to keep my focus on multi-family.

Joseph

Sorry guys, the Great Flood of 2016 in Baton Rouge, LA has definitely delayed my progress on this project. I'm grateful that this property did not flood (had another property that did) as I'm just about over the hump in getting this bad boy refinanced. Here are the numbers as I just got an appraisal value in.

Purchase Price: 75k

Renovation Amount: 30k

Appraisal Amount: 170k

I'm pretty excited I was able to create 65k in equity. I was highly leveraged going into this deal as I used a lot of my own cash and credit lines to tie this deal up as banks can move really slow when you don't have the relationships in place.

Now I just have to figure out a way to tap into this equity and leverage it as collateral for another deal. Based on my readings, some banks only allow 70%-80% LTV which if 70%, this would only allow 19k to be tapped. I'm going to exercise every option I have to see what's the best move here (more to come).

There's still some outstanding items I need to finish up so that I can place a pending tenant. I'll be sure to get some more pictures posted.

I have to admit that I originally decided to focus on apartments (1 deal which seems to be dead for now and the other going through long strenuous negotiations) but the flood events created some good deals that I couldn't pass up. I have 2 single family homes under contract that would be great fit for my portfolio. However, after these are renovated, I'm going to divert my focus 100% back on to apartments.

Joseph

Sorry @Chris Conroy that I'm just seeing this. You can find good deals through relationships as well as direct mail (you can research this here on bp as there are tons of material)

Hello Sandy,

I see you are wasting no time getting started, congrats by the way. I've learned a lot from the podcast here on BP as well as meeting folks locally to discuss RE (there's nothing like speaking to folks that are active). Specifically the local Baton Rouge REIA/RING meetup group has been invaluable. This group meets the second Tuesday of every month. Hope to see you around.

Joseph

@Brandon Johnson,

As stated earlier, I had one rental property that flooded and received about 3 feet of water resulting in a tenant being displaced. I had a team in place ready to tackle this property to prevent any further damage once residents were allowed to return. The issue I ran into here was with the tenants; they had very little interest in moving their possessions so that the gutting process could begin. A week into this, I informed them that the house was going to be gutted and any items they wanted to retain would need to be moved promptly (They finally moved some of their items and the others were thrown out). The remediation is still on-going at the moment.

This property did not have flood insurance and as some of you may know, you have very limited options here. FEMA doesn't offer the same type of assistance to business owners as they do for renters and homeowners. They refer you to SBA for a low interest loan which is good for some and bad for others (I've submitted a few offers for properties where the owners refuse to take out a loan or put anymore money into the property. My phone has been ringing non-stop).

I've maintained a pretty hefty reserve for this property over the years but the flood damage as blow this out of the water. At this point, the property is being renovated with company funds. If the terms SBA provide still provides decent cash flow for this property then of course I'll go OPM with this. If not, I'll continue using company funds.

My top priority is to get this unit back up and running to take advantage of the rental demand.

@Brandon Johnson, It's good to hear from you and to know that you are in good spirits. I must say that you were one of the first investors that came to mind once I understood exactly the impact. I hope you are able to overcome this and become even more successful. This seems as if this is a bump that may have knocked you down and you are choosing to get back up. I have rental property as well that suffered (1 flooded and the other had Rain/Wind damage) as a result of this and I'm beginning the recovery process so I understand your situation. Keep us posted.

Doris,

While i'm in Baton Rouge, LA, I caution you to find someone who is very very familiar with this type of loan. It could end up costing you the deal if you don't. I once worked with a broker who had recently established a relationship with a direct lender. It took the broker about 4 months to pull everything together; a very stressful position for me.