All Forum Posts by: Ryan Daigle

Hey @Zee Singleton. Congrats on finding what appears to be a great deal in this market.

Can I assume the reason you're interested in owner financing is that you have limited funds? It's not that the property has low occupancy which is one of a few different reasons a bank may not issue a loan for the property?

If it is such a great deal, and owner financing is not an option, your best bet is to bring in an investor to cover the down payment and reserves. You're not going to get the whole pie in that scenario, but it will get you into a deal you may not otherwise have the capacity to land.

But to your original question – it's not crazy to propose owner financing. Just be careful in how you do it. Make sure you know the seller's motivations for selling and put it in terms the seller finds valuable. Sales 101 stuff.

Good luck!

To all my multifamily real estate folks, I've setup a free Slack channel for those of us that already use Slack all day every day to talk shop. It can be a better format for in-depth discussions than social media or message boards (but definitely doesn't replace them). I'd love to get a group established there where we can discuss underwriting, share deals, etc... Let me know if you're interested, or just sign up yourself here:

https://forms.gle/PYNvmPJucCJj...

All experience levels and investor profiles welcome!

Hey @Nicklaus McCain, the best way to get this practice is to use real data from real deals! Contact brokers and ask them for their current listing. Get on Loopnet and download their financials. Play around with the assumptions and find out where the points of leverage are in every deal that really matter. If every deal looks golden you know you're doing it wrong :)

I have plenty of raw data I can send you to get started from the deals I see, and can underwrite a few deals with you if you think that would help. Just let me know.

I always appreciate @MarcoSantarelli's ability to cut through the noise while still acknowledging market realities. His most recent podcast focused on specifically on your question, @Laurent Meyer

https://castro.fm/episode/XqLn...

@Laurent Meyer no matter what you think of the motives behind the media, government, etc... regarding the pandemic the fact is it is having a real impact on people's lives, their lifestyle and their earnings. We have to be able to separate our politics from our ability to evaluate and react to real world situations.

@Ronan Donnelly had a lot of great detail in his response, but to drill in one level deeper – if you look at who is being hit hardest from the various shutdowns, it's lower-wage workers like restaurant employees, small retail, etc... Those sound a lot like the types of people that live in C-class multifamily.

My expectation is that the economic vacancies in C and lower B class properties will significantly increase in the short term. For how long? Who knows, but recoveries typically take longer than the crashes. I wouldn't be surprised to see bad debt double to triple over the next three months.

A follow on effect could then be depressed rent growth over the next year or two as the workforce population regains its footing and finds new employment (as the demand builds back to normal which won't happen as quickly as the demand was cut).

There's so much variance depending on metro, asset-class, and business model, but you have to expect some impact to MFH assets. These are just a few of the tangible impacts I'm expecting. Hope that helps!

Handsome investors in the pic!

Hey @Dan Kerch, I bet @Chris Levarek has a few suggestions?

According to the Milken Institute, Raleigh is the top ranked metro in the Carolinas for job creation and growth, and #11 in the nation. Lots of good data in this report - things still looking pretty great for our area, long term.

Hi @Justin Jones. Sounds like you and your wife have a plan in place and are already executing on it - congratulations!

Regarding your question about markets, I like San Antonio TX of your list the most. It is the most diversified economy, has consistent population growth, still has good affordability, and is in the real estate powerhouse state of TX.

Buying a turnkey rental property can work, but you're right in that house hacking or fixing it up yourself can offer a better return (at the expense of more time and effort). Is that a tradeoff you all can and are willing to make? If so, then go for it!

Hope that helps. Good luck!

Hi @Paul Greenberg. Creating an LLC to define your partnership, ownership stake, decision making process, etc... is always the safest option (and the LLC will be on the property title). However, that means you'll get less favorable financing since commercial financing can be more expensive than a personal loan. So it's about tradeoffs. If the deal works with commercial financing I would go the LLC route since that better protects everybody's long term interests.

Congrats on getting that first deal!