All Forum Posts by: Zoran M.

I don't mean to ressurect this thread, but did want to add additional color to @Ali Boone and @Engelo Rumora comments as to why large funds have yet to make substantial investments in certain Midwestern markets. When considering the large investors like American Homes 4 Rent, Invitation Homes (Blackstone), Silverbay (publicly traded), most have indicated that they began purchasing homes due to the dislocation between their pre-crash value and pricing during the downturn. They wanted to capitalize on home price appreciation - monthly rental income was a means to an end for most. This can explain why they entered markets like Phoenix, Las Vegas and then Atlanta. These markets has some of the greatest price dislocation during the downturn.

So why not invest in certain midwestern town? In general, they did not experience the same boom-bust cycle as did Las Vegas. Prices went up a little during the boom years and down a little during the downturn. That's certainly that's a function of population trends, as @Ali Boone indicated.

So, will we see large funds in these markets? In time, I'm sure. It will come at a point, however, when they are no longer focused on home price appreciation (other than from forced appreciation) and are looking solely at cap rates.

@John Blackman This is a great post. I appreciate how the status report is almost a form of advertisement. That is, the investor shows his friend, who in turn may be interested an invest. Communication is key and likely sets you appart from other private equity firms, most of whom defer to a monthly or quarterly update.

Originally posted by @Anthony Menches:

Thanks for the welcome. 1900 properties would be an awesome pickup. Having that kind of capital would be a dream.

OPM...

Welcome! Be sure to set up keywords so you know when people post about your local market or topics of interest!

@Engelo Rumora It was Magnetar Capital out of Chicago. They were big players in the CDO industry.

They purchased the portfolio from a developer in Dayton.

Originally posted by @Engelo Rumora:

Welcome @Anthony Menches
Its also great that the institutional buyers have not jumped on board yet.

@Engelo Rumora Shhh!!! :)

Being an out of state investor, it may be best to establish a relationship with a trusted turn-key provider that can also actively manage your investment. Alternatively, you can just buy a REIT like SBY or the countless others.

The best place to start is the MLS if you're working with a broker. They can set you you to get emails every time a property that fits your criteria (size, rooms, baths, city, etc) hits the market. Until then, search homeopath or zillow to see what's out there

I am using a private lender. They are providing me with 100% of the cost to purchase and rehab the property for 15% simple interest over a period of six months. So $15K per $100K invested. Their investment is secured by a note and lien on the property. There is also a personal guarantee.

The agreement is structured so that after a period of six months I have to make a "good effort" at either selling the property (and repaying them) or renting the unit and getting a cash-out refi (and repaying them).

I am using a private lender. They are providing me with 100% of the cost to purchase and rehab the property for 15% simple interest over a period of six months. So $15K per $100K invested. Their investment is secured by a note and lien on the property. There is also a personal guarantee.

The agreement is structured so that after a period of six months I have to make a "good effort" at either selling the property (and repaying them) or renting the unit and getting a cash-out refi (and repaying them).