All Forum Posts by: Theo Hicks

Investors have had success with both. I'd try the one you are most comfortable with first for 6 months. If you aren't seeing success, move to the other one.

Generally, the three main risk points are the deal, the market, and the team. So all of your questions should be surrounding why it is a good deal in a good market managed by a good team, as well as what measure are put in place to reduce the risks across these three points.

It is based on the NOI and the cap rate (which is based on the market and property type).

Get the current NOI from the owner (assuming they've effectively tracked their income and expenses) and work with a local broker or property management company to get the cap rate.

However, you also want to base your offer price on how YOU will operate the deal. Your best bet is to create at least a 5 year pro forma with a cash flow for each year. Then, determine an offer price that meets your CoC return goals for the deal.

H Kendra,

My parents own the group home that my brother lives in. Only reason why she doesn't make a ton of money is because she feels bad charging high rents. Income is essentially guaranteed since it comes out of the tenants benefits. Plus, you can usually get 24/7 nurses who live in the home as well (typical 2 people doing 12 hour shifts), so deferred maintenance is also minimized.

Well all of the expenses listed are $0, so I would say it is too good to be true!

You need to get your hands on the historical expenses in order to determine who much the property will cost to operate.

You're only options are to (1) get seller financing, (2) find a hard money lender or private lender to front 100% of the costs and (3) find someone else who meets the lending requirements to sign on the loan

You should be able to take a loan against your 401(k) - up to $50k - but you will need to pay it back with interest (well, technically pay yourself back with interest).

Finding deals: a great strategy is to create a list of brokers on loopnet (based on the types of deals they list) and send an introductory email to all of them. Then, every two weeks, follow-up with them via email, providing them with a new piece of information that proves your ability to close + ask if they have any new deals. Do this consistently and you'll increase your lead pipeline

Finding expenses: combination of the historical and your property management company who is extremely familiar with the market.

I met the Kenney's at the Best Ever Conference. They are extremely nice and informed and have a lot of experience putting on conference. I looked at the list of speakers and I know most of them. There will be a good combination of detailed advice and strategies as well as more abstract high level motivation to give you that extra push.

I'd personally go the syndication route rather than the private lending route. Less complicated and less risky. But, keep in mind you'll likely have to qualify as a accredited investor to invest in most syndications.