All Forum Posts by: Steve Morris

They're both very good and very busy.

"as the buyer is paying cash for the deal, but after closing, will be obtaining financing. Is this fishy or common practice?"

Not common, but it does happen.  Reasons:

1) w/o financing contingency, quicker close, less problems = Bigger discount on price

2) Property may not be financeable as-is.  He rolls the dice on fixing it and then financing it

Don't think it's any more "fishy" than the average deal, just not as common.

"I have a manager on board and a seasoned friend helping out. I feel the core of our team is great."

Do they have experience running an asstd living operation?  If not, I'd really recommend hiring a manager with experience and use it as tuition and to learn.

ALFs can make good money, but that doesn't mean its a slam-dunk.   You have a lot of variables:

1) Compliance with state (usual) agencies means you need to keep everything in proper running order to satisfy the state

2) Are you taking private (more income) or MediCare (less) clients

3) Turns can be expensive and cost.  Main thing is to keep them filled, so you need to keep marketing even if you are full since getting/losing tenants depends on a lot of things you have no control over.  If you have 100 beds and 50 turns, if it takes 1 month to fill, that's an effective vacancy of 4.17% (50 empty months out of 1200 potential months).  Take 2 months and now you're up to 8.3% effective vacancy.

4) Labor costs, usually most jobs are min wage, however, that means you'll get a lot of turns on staff.  Make sure you keep good relations with your staff.

Good luck.

What sort of security deposit did you get?  In OR, you can hold back an amount to fix things that are NOT normal wear and tear.

Well, I'd try 10%, but it depends on the "hotness" of your market.

In apts, usually, we ask 30 days for books and physical inspection and then 90 days after M/A for financing contingency.

If you said you can close in 30 days (be prepared if they ask for proof of funds, which I would do as a seller) without a financing contingency, that's a big plus since it's one less uncertainty to closing.

Well, to simplify, you can always write at asking and give them a short period (1-2 days) to respond.  I'd make sure I include a resume to show you serious.

Once in contract, you can go thru books and physical and then request a price adjust (aka retrade).

Have investigated it, but usually stick built is cheaper.  Am looking at prefabs to see if that is better.  With prefabs/modules you may be able to short cost some soft costs such permitting.  In OR, prefabs are cert at state level, so the local issues are more on the interconnects.

If you like the container look/feel, look up Kasita, they build modules and have a rack mount solution for like 9 units +/-, but haven't ever seen it executed yet.

Used to be an engineer, but zero chops on writing code.  However, if you come up with a product, I'd be curious.  I'm an apt broker in Portland and talk with owners a lot and the mechanics of their properties.

"DSCR would go to about 0.90 before next purchase is renovated/rented"

Umm, if your DSCR is <1.00, you've got neg CFBT. You have a lender willing to do that already?

Send me an eMail via the DM  Have a couple I can eMail, but not supposed to advertise here.  I broker apartments in Portland.