All Forum Posts by: Levi T.

I just kick started my first deal for a 400 unit complex, and I'm digging into LP funding, using a 3rd parties to raise it, as well as looking at doing some myself. I've downloaded a few pro-formas online, but wanted to see if anyone wanted to share there's? Also does anyone use the same template multiple times for a offering memorandum? Looking for more examples in that area as well. Just working on putting it all together so things look good, and make since as I try my first big pitch. Thanks in advance,

@Yenlan Patton I think everyone else has more than covered what you need to do, but as others have pointed out, you keep saying your sick to the stomach about all this.

I can tell you, this is what being a landlord and rentals are all about. I have plenty of tenants that have gotten a few months time you take in chasing them down, giving notice under the law, and court dates. Some have gotten and as much 6 months extensions due to their schedule and court openings. I wanted to just stop investing in this asset and get back to my tech startups, but then I realized something;

The investment that I thought was great, was not really that great, and my operation process was flawed. I only owned a few units back then. So I stopped buying, I looked at what was wrong and built a new management system, I made new rules, simple rules, that anyone can follow, and turned things around.

I then started buying new properties, for much cheaper. I went from market prices, to 20% below market, then 40%, and finally 50% below market. I fired property manager after property manager till I found a system that worked. I hired top attorneys to write leases that would scare the life out of anyone that had half a brain, I stopped investing in bad areas. I outlined rules on how to qualify tenants that all managers had to follow. We then repaired everything, yes everything, even when the tenant did not ask for it.

After a year of getting things up to speed, I stopped renting or repairing in a panic. Now if I need a unit to sit for a few months to find the right tenant, that's fine, as I know it pays vs chasing rents, evicting, turnover, as court is expensive.

You need to stop and look at your investment and ask yourself if it's really, and I mean really producing the money it should be. You should be able to float 10% vacancy, 10% repairs, 10% management, and a $100 drop in rents or more. If it can't, there is a problem with the investment.

What do you do with a bad investment? You sell it. I know it hard, but you already lost the money when you bought it. The very minute you signed the contract that money was gone. The mission now becomes getting out of a bad investment and into a good one vs always dealing with a bad investment that makes you sick, because nothing is more costly than your life. Money comes and goes, but your health is most important. Best

I would wait till your very close to being done. People can't imagine, and don't trust that a landlord will deliver. Wait till the flooring and paint is on the walls, and only punch list items are left. I also find we get most of our viewings and leases on the last 10 days of the month, then a few more 10 days into the start of a month. Rest of the month is dead. Most my agents will pull the listing mid month before posting it again if it stays listed for more than the 20 day cycle outline above.

Duplicate post? I commented on it before... What are average rents? There is no limit to the number of commercial loans you can have. It is up to the bank to decide how much they will lend you. 30k, 20 year commercial loan, it dirt cheap. If rents are $500-800 month, he has at least GRM of 5 (20%). If he captures 50% of rents, he is at least earring 3k per unit, per year. His GRM is hitting 3.12 (32%) if he is getting $800mo. He could be paying just a few thousand to buy them at them prices, then BRRR or some other combo. He should be hitting economy of scale by now, so his buying power is about to explode if he is doing things right. A handful of years ago, a guy in my area pulled some investor capital and bought a bunch of houses while paying them 8-10% interest only, BRRR till he paid them off and upgraded bank financing. Now he has 400 units. Age is just a number if you making really good investment.

Who is forming the LLC member documents? I see no cost for legal to do this. You could own 50/50, but he could be assigned as the controlling member. Where is the rest of the money coming from? If you own more than 10%, banks will want those members to co-sign on the loan. You could both put in the same amount of money to start, but then he adds more money, if that's cash or via a loan, and in doing so dilutes you to almost zero. Make sure your in first position for liquidation and not second.

When you have a million in cash, don't spend it. Find a bank that does good business with you, and deposit it or put it to work in low risk stocks, then leverage against the value with the banks money. If your making good deals, you will keep your cash and get 100% financing with closing cost and a 90 day rollover HELOC for rehab. Your cash pile will grow and thus you can keep buying with the banks money. It's a win-win, and the only risk you have is making bad deals. I would buy multiplex or string of SFH, depending what's hot or not at the time.

Shop it around, just don't go off one vendors offer. Get 3-5 offers

I'm fairly handy, and can do all the repairs myself, including lay flooring, roofing, electrical, or plumbing. Just about everything I need to repair or flip I house. However, I refuse to do these thing. I don't refuse to do them because it's beneath me or anything like that, I do it because it's bad for my business. To be successfully you need to focus on one thing, and delegate everything else. I focus of the money. Deal making. To make a lot of money you need to be able to do high volume, you can't be doing rehab, repairs, books, management, evictions, and everything else in between, and expect to get past a handful of units. Sure it's all good if it's a few units, and maybe your deals can't support all the above, but as your grow, your deals must support all the above if you want to be able to buy hundreds of units. Operate from 10,000ft.

We use AppFolio; credit card (tenant pays cc fees), echeck, cash at ant 7-eleven. They can mail it in, but processing fees apply. We also send pay or quit notices via email. All of it's fully automated. By the 10th we send copy of the notice certified, the. Hit court by the 15th per our state law.

V'neck T's and sports jackets work. Bankers and finance people wear suits, it's their uniform. Even if you have deep pockets and bling-bling, why dress like a bum. Toss a jacket on with designer jeans and talk business. You want to do deals in shorts, go buy a yacht and have your banker talk deals on it while you troll around the bay.