All Forum Posts by: Rich Littlefield

Correct many lenders will not lend past the term of the lease. I may well be able to help you. 

First this is a though deal anyway you slice it.

I broker loans like this, but I do not need to get paid to give advice, if I can help I am happy to do so. It seems to work out as people end up sending me referrals or they come back later with other deals . So feel free to contact me if you have questions.

Here are  your challenges. 

1. First most lenders do not want to do such small deals

2. It sounds like you have done work on the property. Lenders fear mechanics liens.

I know of a couple of lenders that will lend 100% of the construction costs.  Also they're are few and far between lenders that that will lend a first and allow you as the seller, to carry 100% of the difference. 

Here is one idea, consider putting it in a LLC, or corp and doing it as a joint venture. You retain ownership, he does the construction, you split the money on closing.

If  you do that I know of a couple of construction lenders that will lend you 100% of the cost of the construction. You need to have at least approved plans with your city if not permits. If you need money for permits, the only option is a new private money loan.

Finally, FNMA will allow construction loans on non-owner properties. I can arrange them in CA if you are somewhere else, contact me, I can refer you to someone who can do them. They will give you up to 85%  of the future value, have a low interest rate.

Even in an area with a low cap rate, multifamily housing is a great long term investment.  But expecting a higher cap rate in some areas is just realistic.  

I am here in So Cal. Some areas, say Los Angeles or Orange County, good luck finding a 10% cap rate. Go out to the desert,  you can find them.  I am wondering if that is what you have going on?

Getting the financing on properties like that is tough, so you have a case to make the seller finance the property for you. Do  not count the income in when determining the price.  As far as your question, I am not sure anyone can answer your question with out seeing the property. 

It is the closing agent that is important. Now in your area, they may be one and the same.  But it is the closing agent that is going make those deals.

I do not know if you are a Trump fan, but he did make his billions in real estate. In his book "the Art of the Deal" he said to get the best experts in the field, and do not be afraid to pay them. 

In your case, or on any  property like this, as a lender I am not going to lend you the money on it if they cash flow is not there.  I would appreciate the opportunity to compete for your business.

You also need a good realtor and I would insist on paying the money for a good home inspection. On a property that size it will be expensive, but if you buy a property that needs unexpected repairs, it is even more expensive. 

Finding undisclosed problems is your chance to either have it fixed or renegotiate for the property. Only now it is off the market and you are the only bidder.

Finally if I could give you any advise it is to do your homework and find out exactly how much it the property is worth, make sure your offer contains contingencies, that help you adjust your price in case of surprises, so you do not lose your deposit. 

 Once you know how much it is worth, if it is overpriced, offer them less than what it is worth. No one else will be bidding. If it is under priced, and you want the property, make your offer at full asking price, again make sure you have your contingencies on the offer.

Some people prospect attorneys only because they have customers who might sell cheap. Try  divorce and estate attorneys. 

Welcome, yes it is easier to get creative finance deals in Los Vegas than the metropolitan areas of So Cal,  But if you are willing to go a little out of the way, say near Edwards air force base  which is still LA County you can get some very creative deals done.  Good luck

It may be that your realtor has a different investment philosophy. What I would do, is to instruct your realtor to  put you on the automatic notification whenever a property that only accepts offers of all cash. The fact that your realtor appears to be looking down her nose at the fixer properties might work to your benefit in the negotiations as she may unconscious. If you feel your realtor is not negotiating forcefully enough you may want to change realtors.