All Forum Posts by: Ley Nezifort

@Ashley Garner IRR never really tell the full story. So I personally like to look at a combination of IRR, Cash on Cash, Equity Multiple, Yield on Cost etc. Especially if you're projecting a 3% rent increase that is compounded from Year 1, that will have a very big impact on your exit NOI, thus also exit Sales Price and IRR calculation.

Also, if LPs are involved, the actual IRR result will be misleading because it'd require LPs to RE-invest cash flow distributions at a similar return, and they almost never do haha (another reason I'm not crazy about IRR metric).

But all in all, 10% IRR for a core-plus/ B+ investment sounds good, but unless you're getting amazing yearly cash flow, I'd think you can achieve a higher return if you choose to sell earlier.

@Johan Zafra That’s unfortunate! Most lenders typically use a third party appraisal company to get appraisals done by a certified professional, so most of the time that same report can be used by other lenders. Though you’ll have some lenders that’ll charge a couple hundreds to re-certify that appraisal

@Mike Pat Hey , 70% ARV deals are definitely still doable in Philly. I find 60%-65% deals in south Philly quite often. You'd just have to find it off market, and/or build good relationships with brokers. Since you mention this is your first deal, it'll be a bit hard for the wholesalers and brokers to take you serious so you'd really have to convince them you know what you're doing.

@Maurice Etienne Hey Maurice, One funny thing I realized lol. A lot of investors (including myself) don’t really like sharing the contractors they use or at least the really good ones so the contractors don’t increase their prices from the demand increase of their services. So I like to drive around to job sites, take pictures of their trucks which often has their phone numbers on it, calling and vetting them from there. But how big is this job? PM me and I might have a good referral for you.

@Pablo Ramirez perhaps I'm missing it, but are there specific reasons you want to refi under your personal name instead of getting a commercial loan and refinancing it under the LLC? Unless you plan on making it your primary residence, then in that case you can get a better rate, but otherwise, I'd just refi it under the LLC.

Side Note: If you can, when you're closing on it for the purchase, try to leave title open. It'll save you a few $$ when refinancing. 

@Nick Giarratano Since you posted this in the creative forum, one thing you can do is to find a seller who can seller finance 10-15% while you give them second lien position. And get a lender to do 80%. Not impossible, but It’d require a perfect deal and a perfect lender since not all of them will be comfortable with someone having 2nd Lien.

@Brad Haughton Welcome man!! Yeah it’s definitely not a bad idea to ask. I’d even ask him if he’d be interested in doing a rent to own since you’re already renting from him. Like Ian said, worst they can say is no.

@Andrew Eldridge Yeah like Matt said, I found it quite useful to use agents who have rentals themselves, so you should stay away from the retail agents. As far as what to ask, you should ask them if they’re comfortable putting in lots of low offers ? Comfortable sending you sales & rental comps with every lead they send you etc...

@Sean Banilivy Welcome man, your profile says you're from NY as I am, you'd love the prices here a whole lot more than up there haha. But yes as you said Fishtown is really nice but really expensive, so if you can find a bad home in that area that you fix up, you should totally go for it. 

Brewerytown/Sharswood is up and coming already, and can definitely give you the appreciation you're looking for. I like to stay South of Oxford. 

Lastly, I really like parts of South Philly as well specifically Point Breeze/Grays Ferry area; I've picked up a couple of triplexes there to rehab, and their ARV came back with some good margins.

Hello Investors, 

For those of you who had deals under contract right before COVID-19 and cannot close due to perhaps lenders not lending, or any other reasons that COVID-19 might've caused. Are you guys losing all the earnest money deposit you had in escrow? 

My partner and I had a few deals under contract, and one of the sellers is claiming the EMD because our lenders couldn't lend on the project. I feel as this should be prevented as COVID-19 was no one's fault.