All Forum Posts by: Ryan Zomorodi

Hey Amy, 

Thanks so much for your kind words. Yes, I believe engaging with landlords in the community may lead to future acquisitions. In fact, while recently screening new tenants for this same property, one of the property managers I called as a reference, was the property owner. She is liquidating her portfolio of five single family homes in this same market. Currently working with her to find a solution, whether it means me purchasing all the homes, listing it for her on the MLS, or finding another buyer off-market.

Almost exactly what you were suggesting has initially come to fruition.

Investment Info:

Single-family residence buy & hold investment in San Diego.

Purchase price: $965,000
Cash invested: $330,000

Lead the identification, acquisition, leasing, and management of a large single family house with many bedrooms in a desirable college neighborhood in San Diego, CA. Raised monthly rents by $1,000 within 12 months, creating $240,000 in value at a 5% capitalization rate. Investor partners funded the equity and brought in the debt.

What made you interested in investing in this type of deal?

Successful prior experience in the same market with similar assets managed.

How did you find this deal and how did you negotiate it?

MLS, seller had reduced price and we made a strong offer and were qualified, experienced buyers. As a Realtor myself, I set up auto-notifications when new properties come to market or change price in areas that I'm looking to buy.
Property needed some repairs so we asked for reductions before removing our inspection contingency.
Property was vacant upon closing so I negotiated a "leasing fee credit."

How did you finance this deal?

30-year fixed rate mortgage jumbo loan, 3.7% interest rate.

How did you add value to the deal?

Raised monthly rents by $1,000 within 12 months, creating $240,000 in value at a 5% capitalization rate. Capable, dedicated management and being in tune with the market. Replaced the sewer line, changed the roof, minor cosmetic upgrades.

I leased up the entire house before we even closed escrow! The lease started 4 days after closing!

What was the outcome?

Long term hold with great cash flow and amortizing debt. No plans to sell, yet. Have been more involved with landlords in the same community with similar assets.

Lessons learned? Challenges?

Knowing your market rents street by street is key. Being available for showings and responsive to all rental applicants, providing excellent customer service and a quality product will get you the business. Have systems in place for tenants. Screening tenants and setting expectations from the beginning saves time and money later on. Played almost every role in the transaction - Real estate agent, investor / principal, and property manager.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Chase bank for great rates but painful approval process. Shoutout to my investors.

@Nate Shields 

Certainly, glad you asked. Here's an example of one of our Chicago deals. 

This one was a full-gut rehab, with a "pop top" second story addition and finished basement. We were able to secure a buyer during the pre-marketing period, prior to rehab completion, which allowed the buyer to work with our project developer to select custom finishes.

Here's the before listing on Redfin:

https://www.redfin.com/IL/Chicago/Undisclosed-address-60641/home/13459762

Here's the after on Zillow:

https://www.zillow.com/homedetails/5106-W-Eddy-St-Chicago-IL-60641/2092666208_zpid/

Here's a breakdown of the deal as it turned out.

$185,000 = Purchase Price

$220,000 = Rehab Costs

$7,030 = Closing Costs & Fees

$412,030 = Total Investment (MDI covers carry costs; reimbursed from the proceeds at re-sale)

$350,226 + carry costs = MDI West Investment (85% of total investment)

$61,805 = Project Developer Investment (15% of total investment)

$560,000 = ARV

~8 months = Hold time

$108,370 = Total Net Profit Before Preferred Return

$19,508 = Preferred Return (Split 85 / 15)

$88,862 = Total Net Profit After Preferred Return (Split 50/50)

$16,581.80 = MDI Share of Preferred Return (85%)

$44,431 = MDI Share of Profit (50%)

$61,012.80 = MDI Total Income

MDI West ROI = $61,012.80 / $350,226 = ~17% ROI

$2,926.20 = Project Developer Share of Preferred Return (15%)

$44,431 = Project Developer Share of Profit (50%)

$47,357.20 = Project Developer Total Income

Project Developer ROI = $47,357.20 / $61,805 = 76% ROI (in 8 months)

Please let me know if you have any questions.

Hey BP,

My San Diego-based investment group is actively partnering with house flippers and apartment investors all across the country. 

We're an all-cash equity partner providing easy access to capital for single and multi-family fix and flip projects.

Our investment model is simple: We split total investment costs 85 /15 and share profits 50/50.

Meaning, we put up 85% of purchase price, rehab costs, and closing costs, and you put up 15%.

We cover holding costs (taxes, utilities, insurance, HOA).

When the project sells, both sides earn a 7% annualized preferred return on capital before profits are split 50/50.

There are no monthly interest payments, upfront fees, applications, appraisals, or credit checks.

Our funds are in-house, so we can close within a few days notice. This is not hard money. We're equity investor partners. We bring decades of experience to help analyze deals, run comps, vet contractors, and the physical properties themselves.

Proof of funds are provided for offers.

Deal minimums: 15% ROI and $25,000 in total deal profit.

Deal maximums: Single family - total investment of $1,000,000 and under. Multi-family - 30 units and under.

No new construction.

To submit a deal for review we just need the following:

• Completed underwriting spreadsheet (message me for this)
• CMA, BPO, or comps to show us the ARV
• Scope of work and rehab bid

We've completed nearly 300 flips in 96 cities (and counting) and have invested over $100,000,000 in distressed assets since 2011. Many of these have been with Bigger Pockets members. 

*CLICK HERE TO WATCH OUR YOUTUBE PROMO VIDEO*

Please contact me directly with any questions. Thanks and we look forward to hearing from you.

Ryan Zomorodi

Acquisitions Associate, MDI West Properties LLC

(818) 261-8387

[email protected]

www.mdiwest.com

Are you tired of using hard money lenders for your flips? 

Need a break from the hassles of lengthy applications and monthly interest payments?

Use private money for your next fix and flip project!

MDI West Properties will fund 85% of total cost (acquisition cost and rehab) and split profits 50/50. We also cover carry costs. 

For just 15% of the total project cost, you can keep 50% of the deal profits. 

There are no monthly interest payments, points, pre-payment penalties, term extension fees, inspection fees, credit checks, applications, appraisal fees, LTVs, etc. We'll pay the first rehab draw in full upon closing. 

Sure you keep 100% of profits when you take on hard money debt, but that's after paying 10-14% interest monthly, 2-4 points upfront, having to front rehab draws, pay inspection fees, draw fees, appraisal fees, prepayment penalties, and so on.. 

Lenders are already taking a huge chunk of your profits. Why not partner with experienced investors who have the same goal in mind? Bottom line deal profits. 

We've invested over $100,000,000 in residential real estate, including millions with Bigger Pockets members. 

We provide full back-office support, including proof of funds, dedicated acquisitions team, due diligence, deal sourcing, transaction coordination, accounting, asset management, and a national network of general contractors. 

Single family AND multi-family across the country. 

Give us a call today. We'd love to hear about your next fix and flip project!

*CLICK HERE FOR OUR YOUTUBE PROMO VIDEO*

Interested. Sent you a PM. 

I work with one main investment group that simplifies capital raising and deal structuring. We primarily do single family and multi-family fix and flip projects, and they will invest nationally wherever the numbers make sense and we have boots on the ground. On single family, they put up 85% of total cost (purchase, rehab and closing costs) and I put up 15%. No monthly interest payments, and they also cover carrying costs during the hold period. We then split profits 50/50 when the property sells. With multifamily it's the same model, except they put up 70% and I'll put up 30% of cost and share profits 50/50. 

For me, it simplifies my capital raise, as I use them for 70-85% of the project cost and raise my 15-30% from just one other investor. Works out super well and I don't have to pay additional capital into the deal beyond my 15% initially. I can also offer my side's (15-30%) investor a handsome ROI. Perfect model if you want to do multiple deals and keep things simple.

@Account Closed thank you and definitely! Glad you got something lined up. I'll send you a PM and let's stay in touch. 

@Account Closed Yes it's absolutely possible. I recently did this, with an equity partner who put up 85% of the investment, all cash, and we split the profits 50/50. No monthly interest payments, so my cash flow was not affected. 

We purchased a vacant lot in a great location off-market, split it up into 3 parcels, listed on MLS and are under contract to sell for around $200k more than our acquisition price. Buyer is a developer purchasing with all cash, so the banks were not around to interfere with the increased value.

This deal could be a perfect fit with my private money investors. Let's chat asap. 

Hi BP, 

I'm looking for a full service real estate company that specializes in distressed single family and multifamily fix and flip projects. Ideally, the company has brokerage, construction, and project management services all tied together in-house or with close affiliates. My investment company buys nationally, and we're open to any market.  

We're looking to create long-term relationships with professional teams who know their market, can source deals, coordinate the rehab, and represent us on the transactions. We're all-cash investors who can close within a matter of days. We provide a robust proof of funds and a have a simple underwriting process in order to move forward on projects. 

Would love to chat if you see any fit between our companies. Referrals are also welcomed. Looking forward to hearing from you. 

Ryan Zomorodi

(818) 261-8387

[email protected]

www.mdiwest.com