All Forum Posts by: Michael Wagner

On a rehab of that size with an ARV of $72 K, I would want to be all in for $50K or so....Why pay full retail and do all the work? Is the owner current on payments? At risk of falling behind? I feel like a short sale is the only option right now.

MIght be a bit strange but signing a confidentiality agreement doesnt cost you anything or hurt you in any other way so why not see where it goes....perhaps the "strange" factor scares away all the other guys so your the only one left making an offer....seems like that would play in your favor:)

Is the rate equal to or better than you could get at a bank? If so, that's valuable over the long term.  Speed is also often an advantage with seller financing.  Seller financing is also hugely valuable for folks who the banks dont want to deal with.  Sometimes its these folks only option and in that case its extremely valuable. Often times, seller financing is offered so that a seller can get more than they otherwise would for a property.  Seller financing is great but not so great that it merits paying more than a property is worth.  Are you in the market to buy a property at full retail as this one?

Short Sale...if he owes $35K but the house isnt worth that, either he has to come up with the difference (or not sell the house) or you have to convince the bank to "forgive" any shortfall and sell the house for less than they are owed. I'm not all that experienced as I have only done two short sales (and only one was residential) so I'm sure others can give you more specifics than I could.

As a side note, if it is DEAD at this time, just be sure not to throw away the file.  Put it in your "Dead" deal pile and revisit it in 4,6 or 12 months.....Time has a way of bringing Dead deals back to life!!!

I understand that your plan might feel overwhelming now but as the old saying goes..."HOw do you eat an elephant?"...."One bite at a time!"...just take the first step. Start reading, getting smart as you have already started doing. Then start looking at properties. While you are saving, you can still go out and get properties under contract and wholesale them to other investors. Or you can serve as a bird dog to more experienced investors....you find the properties and bring them to them to buy. In exchange you get a finder's fee as well as some valuable experience. I bought my first house in 2007 while still working full time. I quit my job in 2011 and my wife quit hers in 2013. We live comfortably while spending just 10-15 hours per week combined on our REI. AND THERE IS NOTHING SPECIAL ABOUT US.....ERRRRR....I mean THERE IS NOTHING SPECIAL ABOUT ME...my wife is VERY SPECIAL! All kidding aside, you can execute your plan if you commit to starting it and not giving up until you've achieved your goals. I think you will find a lot of good advice here on BP.

What size loan are we talking about here, ballpark? I know it seems far fetched but sometimes getting the run around from banks can be a good thing.  As they say, necessity breeds competence.  Your current situation requires you to solve this problem the hard way (possibly without banks) which will develop creative financing skills that will last you a lifetime.  With that, how much money do you have saved and how much of a mortgage are you anticipating?

You have ALREADY DONE THE HARD PART....in that you defined what "enough" is for you and established your own definition of success rather than blindly accepting that "more money and getting rich" is essential to achieving success. In addittion to CAP EX, you might also spend some time calculating how your expenses might change when you "retire"....some categories might go down (commuting expenses, work wardrobe, etc) but others may go up as you'll have a lot more hours available to go out and "enjoy living". That enjoyment might be free but it might also change your expenses. Also, bear mindful of future personal captial expenditures like auto purchases, etc. Just want to include an "escrow" of some sort for depreciating consumables like cars....My only request is that you update this thread with your progress!!!!:)

 That seems like a good thing....just done a lot more informally here and without the cost....one of the perks of smalltown USA I guess! Both options sure beat paying $5-10K (or way more) on drawings that never get used.  

 Any offering will list rentable square feet....that is the number you use to make apples to apples comparisons!  If you are looking at a conversion project, the general rulo of thumb is that 20% of a clear span building space will be lost to hallways and common areas.

Some properties will be sold with approvals in place.  Others the attached land is zoned storage so as long as the you can meet planning board requirements, there shouldnt be too much challenge but I do recommend getting with the enforcement officer as well as in front of the planning board for what is often known as an "informal review" to see what kind of appetite they have for your development.  An hour spent in that meeting will let you know if you should expect any major obstacles to further development.

 You are exactly right.  I look to create equity explosions by finding under-performing facilities with land to develop.  To me, its the best of both worlds (buy existing for cash flow vs. develop from ground up for greatest equity gains) You get cash flow from day one to offset some or all of your operating costs (rather than feeding the alligator for 1-2 years with new development) and you still have the Value add opportunity that comes with an operational overhaul and subsequent expansion.

I personally only invest in low crime areas. Around here, that puts me in suburbia (and even more preferable is rural small towns because of ease of development as compared to affluent suburbs).  I find that the management headaches are less just as they are for MF in these areas.  That being said, the legal recourse storage operators have are hugely favorable as compared to MF.  Lien laws allow storage owners to recoup most or all of the lost rent associated with non-payment if done expeditiously.  As such, I personally would probably accept a slightly less desirable nighborhood to invest in storage than I would MF.

Yes population and existing competition are two of the biggest considerations.