All Forum Posts by: Salvatore Lentini

I would do private lending but you need to dip your toes in first.  I can't wait to be in the position that my private lenders are in.  Having their money work for them.  Definitely don't dump $2 million all at once.  Having too much money and not enough real estate knowledge is a recipe for disaster.  I'm not saying you need to learn all of the ins and outs of real estate but having a working knowledge of what you're investing in accompanied by strong legal docs drawn up by an attorney (not dowloaded for free) will go a long way.  Eventually you'll find a handful of dependable investors that you do repeat business with and it will require less and less of your time.

Hi Jorge-  contact me with more details about the specifics of your lending.  I am working on a bunch of projects right now (flips, rentals, apartment building rehab) and actively searching for more.

I've started using Michael Blank's Syndicated Deal Analyzer.  Seems pretty good so far.  There are a couple aspects of it I haven't quite been able to work the way I want them to but all in all a decent purchase to point you in the right direction.  You can also get on some lists of commercial brokers and you'll be able to see their offering memorandums.  In there you can get a lot of useful info (employment stats, demographics, trends, market rents, pro forma number etc) that you can use to directly apply to your deal if it's in the same area, or as a guide for items you need to research.

You can also pay a contractor to come out and give it a once over.  It will be cheaper than a commercial appraisal ($2000-$2500 - at least around here in Philadelphia suburbs) and a commercial inspector (priced per unit - expensive).  I'm not saying you will be able to avoid these fees if you end up buying the building (lender will require it) but if you're looking for a cheaper way to screen/weed out potential purchases, paying a contractor is cheaper.  If you already have a relationship with a contractor he may do it for free if he thinks it means he'll get the business.  You'll also likely need to do a Phase I Environmental (again in the $2500 range) which pulls up the history of chemical spills, soil contamination, water quality, etc.  But again, with commercial you can end up spending a fortune if you do all of those things on every property you're interested in.  Look for the cheapest options available to screen each property.  Better to spend a few hundred bucks and find out it has structural damage, outdated electric, siding and roofing issues and walk away to move on to the next opportunity.  Does that make sense?

The greater fool method. Funny, never heard of that moniker.  Love it.  It looks like @Omar Merced has experience in the investing/managing from afar arena so I'm guessing he has a plan?  Omar you have a plan to deal with a VERY hands on project like this right?  The property itself from the exterior will clean up nicely but the big question is, what is the area surrounding it like?

My accountant mentioned that moving forward, since my projects have been increasing in size, I may want to discuss LLP's. Up until now I've just been doing private money at a high interest only rate, rehabbing, refi'ing and then paying back the private money. Any thoughts here on LLP's as a way to buy larger properties?

Hi Travis-

What kind of terms do you get on your commercial financing for SFH? I've never thought of that. I am running into the same issue getting approvals due to debt to income on 9 SFH and a 15 unit apt building.

Hi Yenika-  Welcome.  I'm a rehabber and landlord in the Philly suburbs.  I'm interested in any wholesale deals you get under contract.  Good luck!

I'd be curious to hear of any other solutions other BP members have.  Pros and cons.  I'm estimating I'll be in need of software like this by the end of this year (Excel is getting unwieldy).

Hi Brady-  Wholesaling was how I got my foot in the door of real estate.  It's not for everyone but if you find a few good rehabbers and ask what they're looking for and what you can do to find them deals you'll get a lot of good info.  Make a a few wholesale fees and then once you have enough for some down money (get the rest with private money, hard money or partner up with someone else), buy your first flip.  I believe this industry is all about trial by fire.  You can read all the books and go to all the seminars but in the end, you need to jump in and learn in real time.  In real estate, as with any investment, there is risk.  But it's all about mitigating that risk.