All Forum Posts by: Matthew John

@Dennis M. Oh yeah, no way they're getting that. I would rather do a bank loan with 20% down. Knowing the last updates were 12 years ago, I'm factoring in 35k off the top for expenses (mostly capex). My initial offer will be 115k and see if they talk from there. 

@Lynnette E. Wow! This is a great idea if they're willing to talk. Could be a red flag if they don't. 

@Brian Garlington Solid Advice! So the goal is to not look "overly interested" while also coming up with a fair offer. 115k sounds low, but if it needs 30k+ in repairs soon because everything is old then I don't think it's unreasonable. 

@Brian Garlington Do you think I lose negotiating power if I find anything during an inspection if I already offered near market value?

Based on the last reno being 12 years, I know it will soon need a roof, furnace(s), hot water tanks, and from the pics of google maps a new driveway soon. I am coming up with a flexible price of 115k to start before looking at the inside. 

I also don't want to rule myself out because even at 150k, it will still cash flow decent. 

@Kenneth Garrett Judging by some of the responses I received, the bulk of the renovations are 12 years old. I factor in about 35k in CapEx (without seeing the inside) and I think starting an offer at 115k is the way to go. I think he just doesn’t want to disturb tenants with people who aren’t serious. If I can justify my offer, maybe they’ll bite. With a strong cash flowing property, I think it’s worth pursuing. I see people trying to sell 2 units in this same area for 150k.

I'm trying to analyze a triplex that's for sale, but the units are fully rented out and the owner wants a written (and accepted) offer BEFORE scheduling a time to see inside. 

He then said, to go inside I need an "insurance inspection" or to go through a contractor because the tenants don't know it's for sale and he wants to know I'm serious. 

The triplex is listed for $149k and it's renting for $2035 with current tenants in place. 2 units have Section 8 Tenants in them. 

The reason to sell is to "alleviate some of the basic property management problems", but it's managed by a professional property management company. 

Stats about the deal

- Built in 1920

- Last renovated 12 years ago (roof, kitchens, furnace, floors, electric, and "90% of plumbing")

- No Central Air

- Garage converted to shared coin operated laundry/storage

The seller is an international investor. He would like 20% down payment Land Contract at 9% interest on a 6 year note. 

I don't like the 6 year note on 9% interest and can get better rates with a bank loan, but I would like to come up with a fair offer for him based on the necessary repairs. With the property being rehabbed 12 years ago, I know it's going to need some CapEx work done shortly.

Without being able to go inside, how do I come up with a far offer for the seller?

@Lien Vuong Hey! Would you mind sharing the name of your HML? You can DM me if you don’t want it public.

I am also interested. 

@Michael Benanti Hey Michael, welcome to BP. 

First thing I would do is find a place you want to invest. The way I did this was by finding the best area around where I lived. I looked up all the statistics about my area and found the place with the highest growth potential. This is based on jobs, income level of population, if the rents will cash flow, low crime rate, upcoming city development, and rental demand. 

Once you have that done, I would just start searching on Zillow and looking at as many houses as possible. If you see all the houses are listed around 100k and they're looking good for the area, you'll want to start looking in the same area around 70k or less. 

It's super hard to find deals on the MLS right now. It took me 3 months of looking every day & going to see dozens of houses before finding one. Most of the deals are done off market and you have to find motivated sellers.

If you're just starting out, I would either look on the MLS for a long time like I did or partner with someone in your area that's already making it happen and you'll learn a ton!

Hope this helped! Feel free to reach out if you're interested in my area near Detroit. 

@Matt R. As someone who's very much in tune with the Crypto World, STOs are the next big thing. 

In 2017, we saw the year of the ICOs. I bet in 2019-2020 we will see the years of the STO. I've spoke at the Blockchain Futurist Conference in Toronto a few months ago and one of the other speakers was Polymath. They are a platform for STOs to launch on and on of their projects they announced was tokenized real estate. This might actually be it. 

Anyway...it's an interesting idea and I know many people looking to dip their toes in it! Certainly lowers that barrier to entry for noobs to get involved. I'm excited to see how it all plays out, but I'm bullish on seeing more of this pop up over the next decade. 

@Aaron Johnson Feel free to send me a message!