All Forum Posts by: Shannon Sadik

I'm always interested in networking with others in the REI. There is already a monthly meet up group, if you aren't aware?

@Mike Dixon, my suggestion is to put down as little as possible every time you can. This will help preserve your cash longer, especially since it sounds like your grandfather has more you can buy. The minimum most banks require for a down payment for non-owner occupied investment property is 20-25%. There's really no way around that. And most banks don't care if you are just starting out as long as you have the down payment. The only reason why your business' age could be of benefit to you is that eventually in 1-2 years (depending on the bank) they will let you count that rent as additional income which helps you qualify for more money. 

If at all possible, since it's family, see if you can get creative with the deal. I understand you don't want a long term loan with him, but maybe there's something else you can do. The sky is the limit on what lawyers will allow here in Rochester when buying houses. It's all up to the seller and buyer. You haven't responded to questions about owner financing so it sounds like this isn't an option? 

A great option is to buy the house at 70% of it's ARV (with private money) and then quickly refi it. Some banks can do it in around 45-60 days. then you didn't pay much in interest to the PML and you didn't have to put any money down at all. You just have to be sure you get it at a good enough price to make this work.

I question your purchase price. Is your grandfather trying to give you a deal at all? Don't go by zillow or the tax assessment. Neither is necessarily accurate. Try running your own comps or get a realtor to help if you can. That zip code ranges from very very low income properties to good ones, so it's impossible to say just from that. 

Wow! Can I ask what PM company you used so we can all steer clear? 

@Diana Ferreyra we want to use private money for all of it if possible. 

I am looking at potentially purchasing an apartment building. I have looked at several of the pro formas here on the site as well as others, but am struggling to analyze a second loan for a PML from these spreadsheets. The property is a 30 unit. I am waiting on actual numbers, but the projected numbers indicate: 

Cap rate: 11.7%

Cash on Cash: 22%

Cash flow/mo: $4228

I can get traditional financing from the bank for 75%, but need to come up with 25% down. We are thinking of offering ~$920,000 for the property, which would require a $230,000 down payment. 

I have talked with a few investors who buy apartments and they said it's not often that you can find a PML with rates that will support many deals. How can i determine that in this scenario for sure? I have a meeting with a PML on Thursday and need to figure out what to ask for, or cancel the meeting if I don't think he will like the return. I've heard he typically lends at 3 points and 12%. 

I'm also open to creative terms if anyone has ideas? I thought about suggesting he pay all of the down payment and then I offer him 50% of profits. 

Thanks for your help!  

I am also in NY and plan to start an LLC to transfer several of my properties into (not really sure how that works after the fact). I was wondering if I would have to create another LLC after that so I don't have too many in each LLC or could i possibly do a DBA instead. What is an Assumed Name?? Why did you opt for that instead?

I concur. Blue Axis Homes. @Rebecca Lebowitz is awesome! 

@Joel Barrett, unfortunately there is no magic answer for that here on BP. If you become a pro or plus member, you will have access to what other members post for sale. Not sure how much you will find in Rochester specifically. Otherwise, I'd suggest you find a good realtor for access to the MLS and network to find some wholesalers or you can start doing some yellow letters yourself to find your own deals. Craigslist is also an option. Good luck!

Everyone, thanks for your input. My question was never IF they were going to quit. I assumed that would be next to impossible. It was more a legal question/discrimination issue that if your rules state no smoking and they say they won't, then what? How can you say "Sorry, I don't believe you." In the past, I've smelled smoke on applicants very strongly and asked them point blank if they smoked and they said no. Fortunately, I could find other reasons not to rent to those folks and def wouldn't since now I KNOW they are liars, but in this situation, I had no other option. Everything else checked out and no one else lined up. 

After all that, it's a non-issue now because after a week of communication and me checking all their references, etc, they have just announced that maybe the place is too expensive for them, so now I'm back to hunting again. :/ 

Anyone have creative ideas on how to rent in a non-peak season for a high rent? Should I offer a free TV?? :)  

It's an A neighborhood and the house has been vacant since we closed on Sept 16, so just over 3 weeks ago. That isn't that long considering the time of year and the price we are asking, but as I mentioned, several other deals, including a refi, and another closing at the end of the month, hinge upon bank approval with a certain amount of rent on this property to even out my DTI. It's a tough spot to be in, and not one I would recommend, but it is what it is. We got the house with no money down, so can't really complain.