All Forum Posts by: Matthew McMenamin

I'm looking at a neighborhood that has always been rough. Today, 3 new spec homes have been built and sold simultaneously for $350,000+. In this area, nothing has sold for more than $60,000. Old properties, run-down, crime, etc. I understand why someone would want to buy these houses. I think appreciation is a sure bet based on where they are located. The neighborhood will surely "turn." But who bought these houses today?? There is literally not a single comp to support their value. I'm sure that the bank's appraiser would not agree with the $350,000 price tag. Very few retail home buyers (especially at that price point) buy their homes in cash. So this begs the question: how do appraisal gaps not restrict gentrification?

I've talked to Elements Credit Union in the past. From our conversations, I gathered that their rates were uncompetitive, but their terms were very flexible. Since they are lending their own money (a non-conforming loan), they can do whatever they want. At a certain point, it is not really financially feasible for them to lend money. I recall their floor being around 4%, which is far worse compared to standard conforming loans these days in the 2's. The only purpose I saw in using a credit union (at least this one) that lends from their own balance sheet would be on your first loan (pre-refi). You'll pay a higher interest rate for a few months, but you can refi out of it with little to no fees, no seasoning, etc. 

I would consider connecting with a lender who is also an investor. They will be about as flexible as a conforming lender can be. I know a few in Indianapolis if you'd like an introduction.

He needs a pre-approval letter just to show you T12, rent roll, etc? Maybe since he is a residential broker he is not accustomed to sending out NCND/Confidentiality Agreements.

There seems to be some differing opinions here. How could the buyer have a pre-approval letter that applies to every asset he looks at? I look at MF deals of varying check sizes all the time. I am absolutely not pre-approved to close these deals myself. Your average General Partner/Sponsor will raise 90% of the required equity through a limited partner to buy a $10 million dollar apartment building. The general partner is not approved to buy the deal himself. What if you look at different asset classes? What if you have a consultant like me do your underwriting? Do I have to be pre-approved? 

If you have to be pre-approved and share all your info for every deal you want to underwrite, you're not going to be able to underwrite enough deals and have a full deal funnel. 

I've never had a commercial broker ask for anything other than a CA to be executed before underwriting the deal. If it's a $100,000 single-family property, then I always have to show POF. That's different.

It takes 2 minutes to send the Due Diligence vault over. You're not a tire kicker for wanting to check the deal out. Now if you inspect the property/bring the broker out there with no way of closing, then you're a tire kicker. 

Awesome deal. So was this officially on the MLS when you bought it? I had the idea of contacting probate attorneys for off-market leads, but most of the time they just refer you to an agent who wants to list at full retail price.

I've recently been using a strategy that I think is pretty foolproof. I'd be interested to get some feedback from everyone.

Go on a service like Propstream and draw an area, enter a zipcode, or a town if it's small enough. Pull up a list of all single-family MLS sales in the last 2 years. It should be a couple thousand sales. Export to excel. Sort that list by listing agent email address. Sometimes someone's name gets represented differently (Will vs. William for example). The email should be consistent. Now, you can be done at this point. Simply scroll through the list. If someone's email appears 20 times in a row, you know they sold 20 houses and are probably a pretty good agent!

I take it a step further and run a function that actually counts the appearances of the email. I get the top 5 performers in the sub-market. Call all 5, and then just select based on personality fit at that point. 

Thanks Bryce, I'll have to check it out.

I'm wondering if anyone has experience building out a database of existing homes that shows ownership information and property level characteristics.

I have a non-traditional lead source that will only be providing me with names and addresses. I need a database to throw these leads up against. First, to check if the name I have matches the owner name on record. Second, to check if the property characteristics meet my criteria (beds, baths, sq ft, etc.). This database should ideally update every once in a while to ensure accurate data.

Somebody recommended I start exporting homes from an MLS login in chunks of 5,000 (or whatever is allowed). I was told the MLS won't export ownership information from a local realtor. ATTOM data charges 1,000's of dollars for this type of thing. My best bet right now is exporting from Propstream. This is for Hamilton, Boone, and Marion County in Indiana.

I'm wondering if anyone has experience building out a database of existing homes that shows ownership information and property level characteristics. 

I have a non-traditional lead source that will only be providing me with names and addresses. I need a database to throw these leads up against. First, to check if the name I have matches the owner name on record. Second, to check if the property characteristics meet my criteria (beds, baths, sq ft, etc.). This database should ideally update every once in a while to ensure accurate data. 

Somebody recommended I start exporting homes from an MLS login in chunks of 5,000 (or whatever is allowed). I was told the MLS won't export ownership information from a local realtor. ATTOM data charges 1,000's of dollars for this type of thing. My best bet right now is exporting from Propstream. This is for Hamilton, Boone, and Marion County in Indiana.

I've recently begun negotiations with a landlord for their portfolio of stabilized SF properties. Their one objection is "What will I do next?" They have $1MM in equity and they aren't ready to retire. Ideally, they could 1031 their money into some homes to renovate. This solves the tax problem and gives them a new project.

I agreed (maybe foolishly) to help keep an eye out for potential SF portfolio deals to 1031 into. I feel like I over-promised on this and have killed my chances of ever closing this deal. Deals are so hard to come by these days. It seems unlikely that I will find a portfolio of homes with value add potential in the $1.5+MM range (assuming they use some debt). 

I thought this could be a good discussion on negotiation and maintaining expectations. Also, if anyone has any ideas (or portfolios of Indiana homes) let me know!

@Dan Maciejewski Thanks Dan! I'm assuming this all changes when you go to a local credit union that lends its own money. They can make their own rules since they are not selling a Fannie/Freddie product.