All Forum Posts by: Matthew Drouin

Martin Grizzanti is going to bring the fire!  Rochester, NY

***EARLY BIRD ENDS SOON! Get your seat for $99 before the price shoots up!***
FFREIA Enhanced Members Get 20% Off Their Ticket Price!

At this half day event, you will learn: to find off market opportunities from motivated sellers; to build an automated follow up system to track leads you’ve captured; to systematize your deal flow to avoid feast or famine real estate cycles!

Do you desperately want to grow your real estate portfolio but it’s impossible to find good deals? 😡

🤔 Wonder how other investors are closing on great deals and feeling stunned?

“What’s their secret?” 🧙🧙‍??

If lack of opportunities is leaving you frustrated 😩, you need to educate yourself on the systems and tactics investors like Marty Grizzanti are using. 👨‍🏫📝

Now’s your chance to learn from the best!

This April 29th, Freedom First Real Estate Investors Association and Marty Grizzanti of Upstate Home Buyer present:

THE DEAL HUNTER

At this half day workshop, you will learn:
How to find leads on off market real estate opportunities from motivated property sellers.
How to build an automated follow up system so you don’t lose track of leads you’ve captured.
How to systematize your deal flow so that you get out of the feast or famine of real estate cycles.

These tools and knowledge you gain will allow you to rise above the bloody 🩸🩸🩸🩸competition so you can crush your goals 🔨🔨🔨

This workshop has limited spots available so grab your seat today!

Don’t wait! It’s time for you to…

Become The Deal Hunter

Early Bird , After April 15th $159 - Paid FFREIA Members Receive a 20% Discount At Checkout.
Get your seats here:
https://www.ffreia.com/Events....

@Jay Ben how big is the deal and what type of deal are you talking about?  I have a couple of answers but want to give something tailored to your specific situation.

@Jeff Costa it’s in an opportunity zone but this is not structured as an OZ deal. However one of our exit strategies would be to partner with an OZ investor to do a hotel or apartment conversion. You could easily satisfy the substantial improvement requirement on doing really anything to this building as well as get historic tax credits!

@Tania Leung I think you got some great advice here!

If you are nervous about it. Contact them early to see what the plans are and if you should start hedging for scenarios under the possibility of them not staying.

If you are super nervous, one thing I’ve done is negotiate concessions to them renewing early. Maybe drop the rent for the first renewal year or throw in some tenant improvement allowance.

@Trent Barga ok good to know. Then increasing NOI is really not going to help when pushing the value for your appraisal when you go to refi (maybe a little bit because it will be an improved product)

Make sure your business plan is protected by the sales comps (ideally sales comparables of 4 families) to support your after rehab value if you end up doing this deal!

@Trent Barga

First question.

1.) Are these two four unit buildings on one tax parcel or two? The reason why I ask is because I bought a MF deal that had several buildings 2-4 units spread over several parcels. I ran the after rehab value on an income capitalization approach. When I went to refi, I got hamstrung by the sales comp appraisal approach even though I increased NOI dramatically. Which forced me to bring cash to the table $100k worth, just to take out my hard money lender lest I get foreclosed upon by them for going beyond term.

2.) A D property in a B area seems like a heavy value add. You are probably going to need to push out all the old tenants, which will take time. B tenants and D tenants don’t mix well. My idealistic old self thought that people of all incomes and backgrounds could coexist in harmony. I got bit by that lesson real hard! You’ll need to have some cash to float the property’s cash burn during that transitional period.

3.) On the subject of down payment, financing etc. This deal seems small enough in terms of money size that you might be able to get a hard money loan if the deal has enough upside. If you are buying it right, you might be able to get the whole thing, acquisition and rehab financed by a hard money lender. If that doesn't work, raise the down payment and rehab from friends and family. I would treat your HELOC as a buffer only if things go sideways.

Either way, good deal, mediocre deal, or bad deal, you’ll learn a lot from the process. Your future investment partners want to partner with an operator that has got some battle scars!

@Alexander Canalini

Important questions:

1.) does the remaining occupant qualify on their own? If not, do not release the other tenant.

2.) assuming the remaining occupant qualifies on their own, get a release mutually signed by both parties and any occupant over the age of 18. This release should also indicate that the departing occupant forfeits any rights to security deposit.

3.) get a new lease signed by remaining occupant and any other occupant over the age of 18. Also any occupant over 18 should also be screened before being added to a lease to comply with fair housing. And have any occupant that is considered a dependent identified as an authorized occupant with their date of birth.

Now, for the horror story, I had a similar situation, where the one spouse moved out and want to be taken off the lease. The remaining occupant did not qualify for the apartment on their own unbeknownst to me. There was a domestic violence situation, which led to this needing to take place, we review when you add another lease the remaining occupant cannot afford the rent. The abuser came back and started beating their spouse up, turn up, abandoning the apartment with rent unpaid, leaving behind their 18 year old kid that ended up having parties every night, and essentially became a squatter, they also moved their friends in and it became a flophouse and in New York State it is very difficult to evict somebody that is not on a lease and for which the lease signers cannot be located to assist in the situation.

@Larry Turowski 43 commercial units.  It's a mixed use office building.  Retail on first floor.  If you're looking to go big, check out our Facebook group called Go Big! Real Estate Investors Group

I just started it and am launching a live podcast where the first 30 minutes will be interviewing an investor on the first time they went big and a live Q and A on the second half.

You still fixing and flipping?

@Randy Haller thanks Randy! I hope to see you real soon!