All Forum Posts by: Luke Grogan

I say different things, but mainly that I have real estate investments, or some rental properties. Part of it may be that I've spent some time out of the country and learned how other languages describe things (like in Spanish, one cannot "be" hungry, but "has" hunger). 

I feel the same way now about my work. I "am" not one thing or another, or it can change from day to day, but I do have things and sometimes those things I have motivate me or influence the way I think.

Understood Steve Vaughan We are definitely working it, but the numbers are a little far off to do the cash back at closing, but good idea. I'm leaning towards asking them to hold equity with a buyout offer later. I've been upfront with the lender and they like that thought... BUT, that also creates a taxation issue and there is some sensitivity there.

Lee Smith Would you mind giving any additional details as to what your VA does? I'm on the fence because I'm not sure if the tasks I have are specific enough to quantify and take emotions/analysis out of so they are just repeatable and not based on situational awareness and logic. I have been narrowing down some things I do repeatedly and trying to determine if it's something I could pass off. I'd love to know what you are having them do and how you manage them. I anxious to try...

@Steve Vaughan Interesting story you heard. I wonder how the seller felt about paying taxes on the $25k, unless somehow he wrote it off as a 1099... Did you ever hear about that detail?? ;)

Help please! Any ideas are appreciated.

I'm trying to bring together a purchase of a package of SFR in a commercial blanket loan. The problem lies in my not having enough cash for the full 25% down payment required. Simply getting the seller to hold a second also doesn't work because it puts me at over 75% LTC and just under DSCR thresholds.

I'm hesitant to start shopping for equity partners, 1) because I don't know many, and 2) partnerships always tend to have an issue arise and not sure I want to deal with issues with minority partners, especially if their goal is distributions of capital too early in the deal...

Is there a creative way to keep the seller in the deal that doesn't lower debt coverage ratios or maybe puts a future buyout option into equity? Is there a way to pull about 5-7% more cash into the deal to get it done? I'm close to being able to make it work and not ready to walk away, but the price is not going lower, but the seller is willing to consider something flexible...

What advice are you looking for? Do you want to hold it as a rental or flip it? Not knowing anything about it, sounds like either flip or BRRR would be options.

How long would your private money carry the note? How much work needs to be done?

Came here to say Grow Financial as well. Sunshine Bank also is looking at deals, and I heard Gulfshore Bank is as well.

Devan Mcclish The rehab purchase: $90k, $50k for full gut/rehab, worth $240k retail. Is that in this D+/C- area? That's the one I didn't quite understand, in terms of location. You have a wide variance of potential profit, but if you very rough ballpark of $25k invested leads to $45k profit, and $50k leads to $70k in profit, I would strongly consider only rushing $25k and tastefully do the interior remodel, but leave out high end finishings. You should know the market, but if your future buyer sees the opportunity to install granite/nicer baths, real hardwood, high end appliances, etc, and get $40k in equity/retail value, they are going to love the deal and it should move quickly. You already have a lot of cash tied up in the deal, so I'd work to keep the total rehab around that $25-30k. Plan to make it look like a $50k rehab and try to get into the $180k range to get the most return on cash. Sounds like the outside/foundation/roof needs work. Those cant be ignored, but could be managed to keep costs in check. On the interiors, I like to make the kitchens and baths look A+, and the rest of the interior C+. With the right people, you can do granite/hardwood, but choose a cheaper tile for the floors, and a $7k kitchen can look like a $20k retail kitchen. Clearly, you need to sharpen your estimates and find the best value for your dollar invested.

Nice work! I was just about to post to ask how people are doing with purchasing SFH with renters in place. Seems like a risk that's hard to quantify. I will be curious how the tenants perform, how the manager performs, and if/how you change either/both in a rough area as you described. BTW, those are pretty awesome retail numbers for an area that you described as C/D. Excellent job sourcing this if it is how you describe. Hope to hear the success story in a few years.

Wow, tough one! Family is one thing, parents are another. Friends are also in another bucket. But, after several evictions early on in my investing, I'll tell you one thing I've learned: you can rent to anyone you want that qualifies and sticks to the lease and you need to stick to what it means to qualify and the lease. If you expect 3X rent as income, don't settle for 2.8. If late fees are due after the 5th, don't waive them until the 7th. Parents? Wow, if they were down and out and needed serious help, that's one thing, but clearly you saw they were not spending wisely and respecting that you have rent to pay also. VERY sad to hear you are in this situation with your parents. I highly recommend you protect and save your relationship with them and look at this as family, but business. Apologize without expecting an apology, forgive without expecting forgiveness, do whatever you can to reach them without further judgement. You will recover financially but it's up to you if your relationship recovers. Last thought: poor money management is a systemic problem. Consider that in your rental criteria and possibly even requiring your renters follow a course or book series to get on the path to financial freedom. I don't do this, but a colleague of mine does and I am impressed by his commitment to helping his tenants become financially literate and in control. Best wishes for lessons learned!