All Forum Posts by: Spencer Gibson

@Brock Hoffman Thanks for your response! I have been running a ton of different scenarios and have come to the conclusion that unless I am able to find a partner to help me tackle the top as a flip or conversion and/or help with buying the parking lot then I am at a standstill. I can really only afford to take on the costs of the bottom parcel without losing sleep. I do have some potential partners in the works but unfortunately, their timelines and needs are a little further out than mine. Albeit only a few more weeks according to them but the agent on this property was fired a few days ago and they are about to go live again with a new agent. Not ideal obviously. So I am hoping I can figure out something before they drum up more eyeballs. There are a lot of exit strategies with this building, especially considering that it's already divided up into 3 parcels, amazing location, and has ideal zoning. The problem is as you may know because it is at such a high price point whether you keep it as is or convert the top into a condo it may sit for a while before it sells. I have considered keeping the top as office space and continue renting them out but feel that when I start a full-fledged reno of the bottom for the salon that they will likely start to move out due to the noise. All the leases on the top floor are month-to-month at this point. Ultimately that mortgage carry is the problem and the uncertainty of how long I'll have to carry it until I am open for business is what I am hung up on and most definitely need a partner to take this down. That said, there are a few angles that you mentioned that I have considered but have not totally gone deep on. Thanks again for the thoughts! If you happen to know someone wanting to partner on a cool property in downtown Charleston SC let me know!

I am currently trying to purchase a 2.5-story building that also comes with a parking lot. This building is already divided into 3 parcels but is being sold together. Its parcels are divided by Top, bottom, and parking lot. The existing building is currently a 2.5-story office building. I would like to use the bottom floor for my hair salon location which is one block from my current salon location. The top IMO if converted into a 3k sqft condo would be a great long-term rental or corporate rental as this area brings in big dollars for rentals. But the top could also be flipped for a profit. It would not be a good candidate for short-term rentals due to the area's strict STR policies. The parking lot could be developed into a mix of retail and multifamily as all the parcels are zoned urban commercial and the current parking would allow for residential whereas this is normally tough to do because of parking constraints.

My issue is I can really only afford to purchase the bottom floor and possibly the top floor of the existing building but the parking lot puts me over the edge from a carry standpoint. ESPECIALLY during the year or so, it will take to renovate the existing building into a salon/condo.

The seller has mentioned they would entertain seller financing at a reduced market rate. No idea on rate and terms they would entertain yet but I am assuming it would be an interest-only loan with a 5-10 year balloon. 

My overall issue with this project is the carry costs on the debt that I would incur during the renovation time period which I project would run 12-16 months. I have thought about asking the seller if they would entertain a much lower rate for the first year and the rate would go up to the final rate by year 2 to help with some of the carry costs in year 1. 

My question is and what I would like to get some feedback/ideas on... what creative financing structure ideas do you have for me? Specifically when I need some help with carry costs in the time it takes to renovate and get up and running? I am curious if you guys could share some of your personal creative seller finance stories where you had similar issues with the initial carry burden. Thanks

@Karen Margrave Thanks for the reply. Yes totally agree. Asking investors what they want is generally where I start. I am merely curious to see what creative deal structuring some of the bigger pockets community has done that might be a little out of the box. The more ideas I have at my disposal the more effective I am at crafting agreements with investors. Personally, I tend to try and keep things extremely simple such as 10-12% interest only annualized with no points as an example. But occasionally it helps to get creative depending on the circumstance. Like yours for example... Not sure I would ever think of anything like that. So thanks for the feedback and example! 

I know there are a million ways to structure financing and return options for a private money lender to buy single-family homes. Curious to see how some of you have structured deals with your private money lenders in the past. I am Looking for more creative deal scenario ideas for all types of projects such as a flip, brrrr, long-term hold, short-term rental, etc... that I can take to my private money lenders for options. 

So in the past, I have mostly been involved in the flip game. But it's been a while since I have even done that as my market specifically has been pretty saturated with investors the last few years making the juice not worth the squeeze for some time now. But I have started to see a slight decline in investor activity in my area for obvious reasons and I think that trend will continue as people get more scared. Personally, I have been waiting for a long time for this and am currently ramping up marketing again to hopefully be in a good spot to take down some deals.

I anticipate doing a little bit of everything but would really like to start building up my rental portfolio. Because I live in a popular market I still don't see deep discounts on the horizon anytime soon so I am currently trying to figure out what my bare minimum requirements are for a long-term hold. I would love to get some opinions on this topic for what your minimum is before buying a long-term rental? 

I have always tried to  invest based on actual cash flow but any reasonable amount of cash flow is getting much tougher to achieve these days. Of course, once you factor in tax savings and equity potential, especially in a solid market it's tough to ignore the potential even if the initial margins are slim. 

Just interested in hearing what your thought processes are for acquiring long-term rental properties when there is very little cash flow. I feel like If I try to chase what is considered reasonable RV ratios then I'll never buy anything...

Thoughts and opinions are welcomed. TIA!!

@William Sing Thanks for the info. Yea I am not a fan of using Zillow for pricing but in this case, with bulk mailing, it could be an easy way to get in the door potentially. In my experience, Zillow is most certainly not the most accurate with pricing but it's generally in the ballpark. So I figure that if I set pricing parameters at a certain percentage below what Zillow says then I should be safe. As you know most contracts can be written in a way that allows for wiggle room if you need to backtrack on pricing for whatever reason. But we will see how it goes. I am not totally sold on this offer letter but would like to do some testing to see how it performs.  Thanks again for the tips!

Hello, I am jumping back into the mailing to leads game and have recently gotten a few offer letters sent to me for a few properties that I own. I would like to use a similar letter but not sure how to replicate this with a mass mailing and have the correct offer to auto-populate for each address. I am assuming there's a way to connect something like Zillow for example and have the ability to set a percentage of the Zillow value as your offer for each address but can't seem to find the platform that sets all this up. If someone could point me in the right direction I sure would appreciate it!

@Ryan Moyer this is very common. finding deals and getting them all set up is sweat equity. I've done a ton of flips with a partnership structured this way. If someone has the time and capability to produce returns that said "money guy" feels is fair then it's a pretty fair deal all around IMO. 

Quote from @Andrew B.:

I recently was sent a deal by a prominent face here on BP doing exactly this. They basically were looking for a partner to bring the DP and the mortgage. They manage. Have some other terms in it but pretty straightforward. This is for a single partner. Others have started syndicating, which is a whole different animal. Let me know if you want the whole doc and I can send it over for reference via DM or email. 

 sent you a DM

Has anyone successfully bought multiple Airbnb-style properties using other people's money to include the down payment? If so, what was your strategy? Was it one investor or multiple? What does your return split look like etc...? Any information would be helpful. Thanks