All Forum Posts by: Peter Stewart

There are a few in Indy I am aware of:

• http://www.homebasebnbs.com
• https://www.reddoorrents.com/
• https://elizabethmaorallc.com/

I did two things to survive when I first started as an agent.

1. Fake it till you make it. In my head I pretended like I was an experienced agent in order to show confidence to my clients. I would always ask myself "what would a top agent do" and tried to act accordingly. I never directly lied, but I would use very vague answers sometimes. For example, after being an agent for 7mo someone asked me how long I had been doing it, and my answer was "I've been doing this for a while now". After selling 3 homes, if asked how many I've sold I can say "I've sold multiple homes this year already", and so on. 

2. Join a team. Many reasons for this as a new agent, but when relating to your specific question, it's helpful because you can fall back on the team stats/experience/credibility (ex: "we've sold 50 homes so far this year" or "we are ranked #2 for all of X brokerage this year"). And, if there are questions you don't know the answers to, you have a quick resource to get them from. 

In regards to your investor question, overall, I'd say yes that is true. Less loyalty. Investing is all about the numbers, there is little to no emotion involved. Most investors I deal with are not local, so I don't get any time with them directly like I would a local "normal" buyer looking for their first home. So, there is little time to build a relationship with them. Usually, it's just "I am looking for properties that fit X criteria, send me deals when you get them". And that is fine, as you most likely won't invest that much time in them (aside from setting up a search and/or putting them on a list in your CRM). 

You can ask for a buyer broker agreement, but good luck with that. You'll turn away more potential clients than you'd gain/save by having one. As long as you and the buyer are on the same page about the nature of your relationship and expectations are set in advance, then you should be fine. 

With that said, sometimes you may connect with a specific client and form a good relationship. Of course that is the goal with every client, but it's not realistic to expect. 

With all that said, there still can be loyalty, but it typically has to be earned. An investor won't just be loyal to you because you had a 10min phone convo with them and set them up on a generic MLS search. You have to earn that loyalty, and typically that is done by bringing them deals. Show them the value you are bringing to them (deals, connections for lenders/PM/contractors/etc, etc). Once they see that value, you most likely have a loyal customer.

Thanks @Simmy Ahluwalia! Emailing you now

Hi All,

I am a broker and investor that is looking to break into the commercial MFR space. Ideally with a 5-20 unit apartment building. I have owned rentals for a decade and have a few MFR residential properties, but have not ventured into the commercial space yet.

I am looking for referrals for lenders who do commercial financing at this lower scale (sub ~$1.5M), nationwide (I am looking in multiple states). Most importantly - I need a lender who does not require previous commercial experience/ownership. 

Any referrals, insight, suggestions are greatly appreciated!

-Peter

Cash is king for several reasons. Main one is that it gives the buyer leverage. You can usually get a better price when paying cash. There is no approval process - you control 100% of the money. You can close quickly. And, it opens up properties that are in rough shape and wouldn't qualify for conventional financing (the types that are usually the best deals). You also save on finance fees (usually at least $3000). 

There are loan products available where no seasoning is required. Usually 75% LTV (at least for SFR's). I have personally done a refinance starting days after I closed on the initial purchase (w/cash).

Nope, no breaks. It's their problem and they need to figure out a way to deal with it. It sounds harsh, but if I get infected my bills still have to be paid, I don't get any breaks or discounts. And where do you draw the line? Just the coronavirus? What about a cancer diagnosis? Or a layoff? Or a family tragedy? All these things can impact the renters income, ability to work, etc. Sure, it sucks and it's a tough spot for them and I am empathetic towards their situation. But that's life, we all have to deal with these types of situations and take care of ourselves. By asking me for a break they're just shifting their burden on to me and that is not fair. 

Now...with that said, someone else made a good point. If I had a really good tenant and I knew that this was only going to set them back a few weeks or a month, I would consider making a special arrangement with them to keep them in the property (payment plan, discount on rent, etc). If I lose a tenant that means turnover and new tenant placement fees, not to mention no income when it's vacant. I could lose several months of rent there, and who knows how good of a tenant I'll get in their place. So, from a pure business perspective it could make sense to work things out with a certain tenant should this situation arise. 

I think @Nic S. is spot on. Don't sell it. Never sell a property if possible. I made this mistake. I owned 2 properties in Los Angeles that had appreciated ~400% since I purchased them in 2011. I decided to sell one last year - I used the proceeds to put a downpayment on a duplex here in Indianapolis and the rest to buy a home to flip. I was making $500/mo cash on the property but my return on my equity was very low (~3%). At the time I initiated the sale I did not have a property lined up to buy, and I hadn't seen much come up, so I did not opt for a 1031. Got hit with a ton of capital gains.

Now, my other property has similar numbers but I have a HELOC on it and I'm using that cash to fund the renovation of the flip that I planned on buying (I have since purchased one and started work last week).

In hindsight, I should have held on to the property, maxed out a HELOC, and then use that $$ to buy properties elsewhere. After spending some $$ to prep the property for sale and after paying capital gains, I probably ended up with the same amount of cash I would have gotten through the HELOC. Yet I'm now down 1 property.

I always carry my gun when visiting C/D class properties by myself. It's a legal carry - I have my concealed permit. No reason not to use it for it's intended purpose (self defense/protection). 

@Brandon Spurlock Sorry, I scrolled through all 4 pages and caught the $515 figure referenced, but must have missed the post with the #'s above. Thank you for re-sharing. Sounds like you landed the perfect BRRR!

Great job! If you're open to sharing, I'd love to see how the numbers break down. Here's my guess:

$1000 for rent

$100 mgmt

$515 PITI

$150 vacancy/repairs/cap ex (5% each)

$765 total expenses

$235/mo cash flow 

$2820/annual on $4k investment = 70% ROI

Is this close?