All Forum Posts by: Ryan Hall

I mentioned good intentions.
i think the good intention is making finding a way to ease the economic pain of those who are struggling.
the problem is that there is no solid economic thought.just emotional voting.

Thanks so much for an awesome post and great replies. Super inspiring!!

Inspiring!

Nicely done @Brandon Hicks !

Thanks for commenting Terry,

I'll be getting the terms and rents from him this week and be in search of an investor partner to get this thing done (assuming the numbers check out as expected. :-])

Hey All,

I found a landlord who is in his late 80's and is begging for someone to get him out. He's got two beat up houses (eviction cases) that he needs cash for, but would hold paper on the other 10 properties so he can keep a little income for the remainder of his life. The notes were my suggestion, not his idea.

I'm trying to get into the fixers, but my personal situation may limit my ability to do the deal. I wanted to jump on here and get some advice.

Deal 1:

SFH 2/1, 800 sq ft.
asking 38k
approx 20k in repairs needed (Would confirm during escrow)
FMV (based on recent comps) = 79k-87k
Great rental neighborhood.

Deal 2:
Duplex 2/1 + 1/1, 1500 sq ft.
asking 62k
Approx 13k repairs (would confirm with contractors during escrow)
FMV (based on recent comps) = 110,000
Great rental neighborhood.

The Duplex seems tighter, but, his words, he would entertain ANY offer right now, he's just beyond his ability to deal with these properties (mentally and physically).

I would roll the profits of these as down payments on his portfolio which is currently 100% occupied aside from these two.

ISSUE:
1. I am just getting back on my feet after my wife lost her job. I'm not in a position to bring any cash to the table, and my credit isn't the easy to lend 740 it was before the job loss. i'm in a position where I can find the deals, but need a partner or someone to come in and work with me. I have yet to find such a partner.

2. Most of the HML's I have found online want some cash upfront or don't lend in my state (South Dakota)

3. I'm not very well networked in this industry anymore as I dropped out in the early 2000's during a divorce and am just re entering REI as a relative Noob.

QUESTION:
Does anybody know of a great HML that might look at the deals? I've contacted a few I've found with 'The Great Oz(Google)'. Do you have a suggestion of where to network with people in the industry without a REIA or MEETUP in the area? I've started, but want to accelerate my efforts.

Most importantly, what would you do with this?

1. walk away, save up and push for a deal in december with some cashola?

2. Wholesale

3. Some magical solution my limited mind isn't seeing right now?

Thanks to all who read this, hopefully a discussion ensues that adds value for all of us.

And thanks in advance to anyone who has advice--Even if it's not the kind I want to hear, I need the kind I need to hear from peers and mentors who have walked the path....basically if you are green and reverse your sentences in an oddly muppet like voice, chime in.....or if you're just a Jedi of REI, that's pretty dang cool too. :)

Ryan

Looks like there was an error in saving as PDF.

here is a legible copy.
https://drive.google.com/file/d/0B_pPhag7mLcJd1g2bEVLSS1IMkU/edit?usp=sharing

Hey all,

Apparently my reply didn't post (user error).

Attached is the analysis of the property with a 2nd mortgage (private lender) at 10%.

It seems to me that at this price, with these terms, this isn't a 'hot' deal. I feel like the property is a little overpriced. 

Thanks to all who have chimed in and to any who chime in after this post.

HERE IS THE PDF OF THE ANALYSIS

Thanks again!

@Account Closed 

 Yes, I would have the reserves for problems and insurance, this wouldn't be a problem. 

@Joel Owens 

Thanks, that makes absolute sense on all points, and I definitely understand a seller/bank wanting to see me having skin in the deal, but that's why I'm interested in creative real estate as well. Leverage. :)

I will get more information on numbers from him and most likely seek to get bank financing perhaps with the seller carrying some (maybe I can get in for less skin then).

I agree on the 1/2% interest bump. That is painful, and would quickly kill the property at the current numbers

Thanks guys for chiming in.

I'll explore it cautiously and see what I can do to make a deal. :)

48 Units

44 - 2/1

4 - 1/1

ASKING: $2.7M

Gross: $365,000

Net (depreciation added back) $234,000

New shingles, new rain gutters, great location next to park, not far from down town, preferable area of town. No current vacancy. Was managed by company, now owner managed until sale(company was increasing rates for the year). Owner is liquidating several buildings in the state and cashing out in retirement. Has owned units for approximately 20 years.

40 Units

38 - 1/1 - $490/mo (utilities included)

1 - 2/1 $650/mo (utilities included)

1 Studio

ASKING: $1.3M

Gross: (need to get gross numbers)

Net(depreciation added back in): $130,000

No current vacancy. Includes shop and storage sheds. Good side of town. Is not apartment building, but 10 4 plexes. Was managed by company, now owner managed until sale(company was increasing rates for the year). Owner is liquidating several buildings in the state and cashing out in retirement. Has owned units for approximately 20 years.

Owner will finance one or both.

Financing terms:

20% down

5% interest for first 2 years.

increase rate .5% each year after until 10 year balloon.

I’m interested in getting into this light and attempting to negotiate a way into a no down or extremely low down deal. I can come up with some cash, (20-30k) but would rather not.

Basically, my questions:

What might I be missing?It seems to me that the financing terms are less than favorable unless he is willing to take less down or negotiate somehow.

I am looking for a way to structure a deal that is no or low down, how might you do that?

My thoughts:

1. Seek bank financing with owner carrying 20-30% down payment with prefviously mentioned terms.
2. Seek cash investor to cover 20% down payment (numbers don’t seem to be attractive enough for a cash investor to bring in that kind of cash, but I may be wrong)
3. Flat out tell the seller I’m looking to get in lighter than 20% and see how much he would.
4. If i’m off my rocker, I would love to hear that too. Just trying to make the deal work with little to no down.
   1. based on a quick look at cashflow v. debt service, it looks like (based on the numbers given) this could be a tight deal at 100%. I’m aware of that. What I’m wondering is, how can I make this deal look good and structure it so I am out of pocket up front at a low cost?
5.        It looks like I might need to get more info to really get a good analysis, but this is my first time looking into an apartment unit. 

Thanks in advance for anybody with knowledge and a voice taking a few minutes to give some advice on this deal and what you would do to try to make it work.