All Forum Posts by: Seth Williams

What @Ann Bellamy Said....Also, might not hurt to bump the commission to 2.5% - Huge payday for an agent, short money for you. 

If you arent happy with the pictures, get them re-done, I just had some stuff re-shot and it made a huge traffic difference. If you are going to drop the price, shoot the new pictures first & update them so you can get a one time solid re-push to your clientele. Also. id sit with your agent ( who sounds like they arent doing a good job ? ) and talk about a marketing plan etc. A lot of agents just drop stuff on MLS and pray. Id see what they are doing on social, co-branding with lenders, broker tours and the sort. Additionally, you can see in MLS if you do a price drop how many more people / less people you hit from a "match" standpoint. I do this a lot in pricing strategy, if there isnt many more matches I usually price higher and try and push the market up more. Also, ive tried "range strategies". Say you price the home at 499,999 in MLS and put in the description that you are willing to consider all offers from 499-539 or something. You will create a frenzy here. The downside is if you dont, you have to "raise the price" back in the MLS. Just some thoughts.

I agree with @Ann Bellamy on her comments, but pictures never do it justice. Based on some of the photos the kitchen looks like it might be an odd layout / finish of the space, but again, just photos! Overall looks like a great job. Only thing I would say backs up Ann's point, if you dont get offers today or right after this open I would drop the price, you are better off dropping it than continuing to pay interest. Good luck! 

It would really depend on how the rest is going to get financed. Typically, at least at my bank, they are going to want to see you put the cash in anyway, regardless of the seller hold back, so in this instance the 250k would just be a second mortgage, the bank would still be in first position on the loan, and still want you to put in 375k...Again, this is all depending on the bank so not every bank is the same. 

Is the property free & clear right now? Ive had luck taking deals like this and turning them into more of a short term entire seller hold back  with as little as 5-10% down, and just making the note balloon in a few years. That way I can stabilize, improve rents, improve the property, and refinance. 

Hope this helps! 

Colin I have some tricks, but we would need to discuss some stuff in detail. Price range, cash on cash, cash flow etc. let’s chat 

Check with a local credit union for a portfolio loan, or a loan the bank keeps in house versus selling off. They should be able to let you cross collateralize, or leverage your buildings and use the equity for the down payment. This puts everything in one large loan. Call around, my bank does this exact thing w 80 % LTV.

Depending  on the lender you should be able to do these together as a package commercially. My lender would do that all day up here

It’s important to have a commercial lender already lined up for deals like this and be clear what they can and can’t do before. Try a small local credit union or local bank and they will do a portfolio loan, meaning they keep it In their loan portfolio in their bank, so they can be more flexible. 

I agree with @Pat L.! Depending on the code in your town, if you ever do any work ( by me at least ) that requires changing floor plants with permits, you need to do sprinklers and so on, so it gets crazy! Be careful with that!

As far as financing, I feel like thats easy for up to 4 units ( try and buy a 4 unit first, or a 3 unit ) because you can do FHA or a state program to help get started for like 3.5-5% down! Usually you can always refi these after some appreciation and re-use FHA as long as it stays owner occupied, so that helps with getting more property. Financing certainly becomes an issue once you get into multiple properties though, because youll need more down for sure.

As far as Tenant turnover, treat it like any business! Credit, background check, interview and do as much screening as possible within the law / reason. Personally, I never really have vacancy, although we under write for it & plan for it at ~5% of Revenue ( bank standard here with my bank ) we have yet to have an apartment sit vacant. The reason for this is simple - Math! Think about it, lets say you want 2000 for an apartment, which lets say is "high" but you are trying to get a great tenant. Instead of letting 1 whole month go by trying to get a "high" rent, you can just drop the price. This standard may be conflicting of others, but I would rather rent it at 1800-1900 vs. 2000, because 2000 is a lot of lost rent, 100 or 200 x 12 is almost the same number, Id rather the income over time, let someome move in, and re-raise the rent the following year knowing that if im a great landlord and I have a great apartment they will want to stay. Plus, who wants to move that much!? Just my two cents there. 

Biggest thing that rookies forget is expenses & repairs, stuff comes up, dont spend the money! That simple! Save it for the next deal and improvements. 

I’m not an expert here but a local bank should be able to provide you construction loans once you have a signed approved p&s and floor plan from a buyer. So maybe you can go thru the sell process w the intent to build these homes, leverage the P&S and then get your one off loans to build, and then finally sell and pay off the loan. Check it out

Hey Bill, congrats on getting started. It’s simple, I’d do something low money down to be able to keep your money for reserves or the next one, so FHA is a great option up to four units. I did my first few this way and moved each time to get the property and loan. It’s a great option, have you talked to a bank yet?

You’d really have to do the math on both options, I’d personally opt to do FHA, which would probably decrease cash flow but allow you to use the heloc for another investment. Either one is a great play, & good luck!