All Forum Posts by: Jeremy Holcomb

Spencer, 

I always round my numbers up on every deal to insulate for miscellaneous costs and increases. You are correct I do need to add cap ex reserves to this deal. The units are only at 10% occupancy currently. My plan is to leave them be and renovate the other buildings first. The gentleman who owned them died and his wife was not equipped to deal with it. The housing authority has an extensive waiting list for section 8 in this area with over a 2 year wait for new applicants to be placed. So the plan is to renovate 2 building concurrently and fill them before starting the next 2 and just keep repeating the process.

@Vance Courtney, You are correct about rules they are for a reason. 

I use private money and hard money lenders that I know personally. As long as they are comfortable with the deal I get 100% funding. Some require appraisal/survey fees and others do that as their due diligence before loaning me the money. It also helps when you have prior experience. 

@Nate Ginsberg I do believe @Frank Y. is correct you won’t find them to do down payment/Reno cost as a second lien holder. However, you might find one to do the whole loan. 

I don't believe that 100% financing is long gone. I have private/hard money lenders that will fund a deal 100% if it places under the 65% ARV value. The only costs to me is survey/appraisal and some will use there own people for that.

@Bjorn Ahlblad, I will use the BP calculator when I return to my computer so you can see in that format.

What I stated above is that rehab costs were included with the purchase price. I would only be paying $6.1K per unit and spend just over $17K per unit for the rehab. I just added the 10K to put something in that spot. I also lowered the ARV and the rents for a very conservative figure. The section 8 market rents are actually $135 more per unit than what I calculated and the valuation should be somewhere around $1.5-2 million ARV. Even spending an extra 350K on renovation leaves a cap of over 12%. Please keep in mind these are in a D neighborhood with a 2 year wait for section 8 housing. Also, the costs of repairs are probably a quarter of what they are in California.

 Should be good now.

 Hey Sam, I think I figured it out.