All Forum Posts by: Rob Hakes

I was interested in this post and glanced at it.  I did not see any Insurance costs in there.  Did you include insurance?

@Blake La Grange

Thanks for sharing your experience.  I have been in the process of getting my first property with Spartan Invest for the past few months as well.  Your initial experience seems very similar to mine.

I selected a property towards the end of June, and they just finished this last week with the renovation.  It seems that they had to do a lot on this one so it took a while. I will be starting the closing process in the coming week.  Hope things go well with your.  I will let you know if I hit any major bumps during closing. 

In my opinion, if you want to know the real way to price a note correctly you need to understand the actual formulas behind it. I was in the same boat a few months ago. I spent a few hours figuring out these formulas and then it all seemed really simple without any guess work; Future value of an annuity and present value of an annuity. There are simple you tube videos that help them make sense, but once you get those down it's smooth sailing for calculating notes.

That may or may not help but it made all the difference for me. The formulas look terrifying but after a little studying it's pretty basic.  From there you. Am just enter your 

Desired return and you get the price. 

@Chris A.

Thanks for posting all this.  I am currently looking at buying from Spartan and really appreciate your honest and thorough review.

Any pointers or suggestions before I proceed?

I had an attorney check the actual note and trust deed to ensure I had a first position Lien. And always make sure the transfer of lien gets recorded with the county. It's always good to get an attorneys opinion. 

I am a newbie as well and have found some opportunities to buy performing smaller notes. It is not a JV but the note broker actually fractions the notes among a few investors. There is a participation agreement put into place to cover the 'what ifs' if the note goes non-performing. The agreement does not create a partnership, and you are the sole owner of that portion of the note. From my experience, though limited, these are not easy to come buy right now but do exist.

Right now I am heavily looking at Memphis, TN.  I have also looked into Missouri, Alabama, and Texas.

@Larry Fried and @Clayton Mobley 

Thanks for the solid input and advise.  I will keep that in mind.  

Hello All-

I have been looking into buying some properties with a turnkey company.  From what I see, correct me if I am wrong, most of these turnkey outfits are selling their rehabs for quite a bit over 'retail' value.  It seems that they are valuing the property based on potential income rather than market value.  Though it limits an exit strategy, I can swallow that.  

In your experience, how would the lender handle the appraised value? Would they look more at the retail value or the value based on income potential? Would I be required to pony up a bigger down payment to bring the LTV to where the lender needs it?

This would be my first turnkey investment so any input and direction would be great.

Thanks

@Brian Christensen - I have looked into doing the same thing. It probably all depends on what the particular city allows. I live in Murray and they now allow legal ADU (Accessory Dwelling Unit) aka basement apartments. There are a lot of parameters to be met to actually make it legal (under 1000 sf, proper separation, limited number of tenants etc). I currently have a basement that I rent out, but don't have it 'legal'

I would be curious if you could find a builder willing to go to all of the headache with the city to get the plans approved, and get it zoned that way without it being too expensive.  I am not sure the legalities of the apartment over the garage, but would be interested to know.

Awesome idea for some easy cash flow.