All Forum Posts by: Luke Grogan

^^ what he said, spot on. Abraham Saldana Put your money somewhere that it takes 2-3 days to get it and preferably something even harder to get. Auto savings in an account like Aly, Capital One 360 or another high yield (0.75 - Ha!) savings and have it go before you even see it in your account. Qapital is another option to round up everything you spend to the nearest $1 or $2 and put it away as savings. Doesn't sound like much, but you'll get another $1000 per year. Spend less than you make and less than you save, but that's much easier said than done...

Unless you can find a package that shows actuals, pretty much anything off of LoopNet or from a broker is not going to be accurate. You can almost safely conclude that expenses will be around 45-50% of gross income (current, not pro forma), send in your LOI, if accepted, then dig into the financials and proceed from there.

Awesome post with good information. Thank you!

Portfolio lenders are banks and credit unions that don't package and sell the loans (paper) to investors. They have their own underwriting guidelines and will easily explain them to you. Each bank has a different risk tolerance that they underwrite to, so just start calling all of the local banks and credit unions within about a 30 mile radius to you properties and let them know what you have.

I spent a lot of time doing this and found that the best approach, for me, was to put together a real estate worksheet showing all of the pertinent details (when purchased, how much, how much invested, address, taxes, insurance, net income, and value (I include a link to the trulia page, but that is for my SFR).

In addition, a letter of experience that includes how you underwrite purchases (i.e., assign value and screen your deals), what your goals are going forward, and your use of funds if cashing out. Also have a balance sheet and personal finance statement ready.

Call as many banks in the commercial lending department, focusing on credit unions and smaller regional banks. Also ask for references on aggressive banks. For now, I'd stay away from brokers until you've gotten some feedback from banks. I've yet to find a great broker, mostly just "decent" and they didn't bring me a lot of value. Make it a goal to call 10-15 new banks each day and follow up on messages every three days or so. Also use LinkedIn and if you can find emails, follow up voice messages with the information I mentioned, along with your proposal. This goes a long way in speeding up the process and getting at least a couple of banks interested in funding either this deal or future deals.

From there, set up a few face to face appointments and start negotiating the best terms... Smile and Dial, my friend!

@Marc C. Marc, thanks for the post and information. If it's not too much to ask, can you help me understand a few things? Why would a seller accept 0-5% down (I'm assuming owner financed) at the same 5% interest? Would it be because he'd make more on the interest over the life of the loan?

Also, how do you brake down how much they would receive with taxes in the next year? Is it just assuming 15% cap gains on the full amount vs an assumed 30% tax rate of the payments you'd make?

Do you have to know the addresses of multi-family buildings, look them up on tax records, then mail to the address of record, or is there a work around to getting access to all multi family owners information?

There was a thread a while back where @sachinacharya offered to help build Excel spreadsheets to members. Not sure how active he is, but I'm always a fan of spreadsheets and I'd love to use something like this also!

Can you get a USDA loan? I think they can do 90%, maybe 100% in some cases? If it's outside of Gainesville, and that big, it's likely considered rural (I used to live "outside" of Gainesville!). Not sure how much you've checked, but I'd look there. Maybe other programs are available if this is your first home purchase...

I agree with @Julie Marquez that getting a rental first is my preference. I did the opposite the first time I bought and the second time around, I bought rentals and I am still currently a renter. It helped me focus on building cash flow which I can now use as income to purchase an owner occupied home, if we choose to go that route...

Call David Darnell @ HomeBanc in Tampa. They lend all over the state and are very aggressive. PM me if you need contact info and let him know I sent you over.

@Jennifer Sisson Sounds like that's the standard rate for PM without any of the PM services. I'd call around and specifically state that you are managing it, but need an agent to get it listed on the MLS and do the first screen and the credit checks. They will keep the application fee to cover their screening costs and I pay 50% of the first month's rent, but I think 75% would be reasonable. Possibly up to 100%, but make sure that you have final say over tenants and not just accept whoever they put in.

The biggest make/break is tenants and cashflow, IMO.

The other thing is make sure you talk to you Uncle and let him know how much you want to make it work, but if it just can't be done remotely, you will need to sell it. He shouldn't be overly concerned at this point if he's just letting it go based on back taxes! He should understand what's at stake...

There is some good advice here on this thread. Just go in eyes wide open, screening it as realistically as possible. Also know that problems will come and make sure you are prepared to pay for them or worst case, fly out and deal with them...

David Darnell at HomeBanc is the man. Also try Michael Kilpatrick at Grow Financial credit union. PM me if you can't find their info online and tell them I sent you. GTE Credit Union and USAmeribank are also aggressive.