All Forum Posts by: Michael Glaspie

Purchase as a bundle and sell off the ones you don't want down the road. There will be some paperwork that has to be done when a property is cut off and sold, but your lawyer and lender will take care of that. 

The biggest consideration is to make sure your cash flow can cover your debt service. That's the way the bank will lend on it. So if it is cash flowing now and it covers your debt, you are good to go. Then keep that in mind as you break it apart in the future. Always think about the debt service and if the cash flow can cover it. 

Ah ok. Are you looking to wholesale this property? Or do you own it yourself and you are looking to sell it? These are two different strategies. As a wholesaler, you can not hire a listing broker, but you could offer a broker commission based off of the sales prices and it would come directly out of your profit margin. 

If you own it and don't want to have a broker list it, you can still offer a commission to any broker who brings you a buyer. That will greatly reduce your expenses upfront. 

There are a few OM template websites out there as well. If you have the property under contract then you could potentially hire a broker to complete an OM for you. Overall if you are selling it make sure you know everything that YOU would want to know about purchasing a property.

Find a way to purchase this property as is. This will be one of the most beneficial learning experiences you will ever have. @Diana Muresan brought up a very important point of the NetWorth Requirement and 'experience' that many lenders would want to see. So, you can counter that by bringing on a partner with experience and capital. Maybe you can find a property management company owner who would be willing to partner with you. Just an idea.

Next is capital requirements. 20-30% is around where most lenders will expect a downpayment. Potentially you can talk to the seller and consider a few options:

1. Seller finance the entire note with whatever downpayment you can afford. 

2. Seller finance a portion of the note. 

3. Find PML for a portion of the down payment

4. Find an investor who can purchase the whole property. They retain majority ownership and you get equity just to be the boots on the ground representation and manager. (This starts your credibility)

5. Someone mentioned rezoning (interesting idea. Might be a waste of time, but you won't know until you start digging into that possibility deeper with local municipal zoning authorities)

There are a few more creative options. I recommend you dive deep into this one and take everyone's Ideas to heart. I am currently doing the same for an apartment complex in my area. I thought I knew a fair amount until I began to explore ALL the options that came to mind. It will be a great education process. 

Best of luck. 

@Sam Askar I love this idea. I may not be the best source for this information because I have limited experience with student housing. So, I will touch on your points individually:

How can you build them on the cheap to make Sense and make the numbers work? and still, make them look nice For students?

• If you are a builder, I think you have already had the answers for the cheapest build. Material, labor, and the other factors involved you know like the back of your hand. My suggestion would be to choose the most durable material and the lightest price. So, LVP instead of carpet and the least expensive LVP choice at that. I believe DURABILITY is key with students. 

Should I go with a plan for 2 master bedrooms with 2 bathrooms. ? Or 3 beds with 2 bath. (1 master bed ). ?

• The large 'master' bedroom isn't so much important as is the individual bathroom in my opinion. In my limited experience of both being a student and an investor in a smaller student rental, each bedroom is rented individual in both circumstances and if you have a bathroom to your own specific room the amount charged would be higher. Not the size of the room itself. Not to say you can't charge for more if more space is there. So, after you crunch the numbers a 3/2 may make 3 rentable spaces, but if you can charge a premium at 2/2 that exceed it, then that may be the choice to go with. 

Anybody have done /rented to students in the past?

• I invested in a quad with my brother near the Texas A&M campus. I was out of state and a passive investor so my knowledge is aware of the strategy but limited to details. 

Overall I know that each campus is different. I know a local community college can not have the same expectations as a major university. You would know your market the best and I think with a little more research in sales/lease comps, asking student body, reaching out to student housing to ask about there typical requirements/standards/comps, all of that would answer more of your questions. 

@Lawrence Holloway speak with lenders. Every lender is slightly different. Most have traditional Fannie/Freddie products, but others may have products offered by smaller lenders. 

One product you should look into is one called 'Delayed Financing'. Especially if you are buying them, turnkey. The biggest piece of the puzzle is HOW are you buying these. If you purchase all cash, you can finance as soon as possible. There are no time constraints to finance a property that you own outright. 

If you have an existing loan, there may be prepayment penalties, or some other restriction,  that you need to be aware of. 

Best of luck.

Every state is different. Typically if all you want is MLS access, an agent can grant MLS access to ONE(1) assistant. If your wife so chooses, she can simply get hired on as a licensed assistant. She can get an hourly wage and MLS access. Then, if she wanted to complete a transaction, she could refer the lead to whomever she is working with and receive a commission. This will reduce her monthly obligation and her overall responsibility. However, in order to operate fully, just like everyone mentioned, she must work under a Broker in Charge (BIC), or become a BIC.

@Oscar Pinto has some really good ideas. A few more options that your potential firm is already doing:

• Broker Opinions of Value (BOV) - similar to CMAs with residential
• Project Management 
• Consulting/Advisory

Bottom line is the real estate/sales life is the life of an entrepreneur. There will be ups and downs. The more streams of income you have the more stable your lifestyle can be. There may also be bonus or profit share structures at the company that you could ask about as well. Or additional assignments within the company. 

I hope this helps. Best of luck to you.

Yes, the value of your midwest homes may be too low to individually refinance. But what was being referred to above was if you are going to transfer to LLC, then you can get a portfolio loan. Then will allow you to place a lien on all the properties and walk away with more capital to invest.

Ultimately, you have to decide if the LLC protection is more important, or the flexibility of the HELOC. The LLC has some tax benefits (briefly mentioned above) in the fact that now you can itemize much more, even though it will still act as a pass-through entity at the end of the year. The primary benefit of the LLC is asset protection. Ensuring the tenant (or anyone who may sue you in the world outside of real estate) cannot sue you and have access to ALL of your assets.

And ultimately, say you decide HELOC is more important now, then you can do an LLC later on. Nothing is permanent. Best of luck.

@Shane H. you are exactly right on what a special assessment is. If there is not enough money in the HOA account they will then charge the owners.

Mortgages are the responsibility of the borrower. But there are many loans that go into default because owners decide not to pay their mortgage. It is the same thing with Special Assessments. In my opinion, a quality HOA will have major expenses fairly projected and have other activities in the community to help raise additional funds. To prevent special assessments. But they can not control the actions of individual owners.