All Forum Posts by: Chris Winterhalter

@Brian Daly

East to West - La Mesa to Coastal

South to North - Logan Heights to Clairemont (maybe further North by a little).

Since she is on a budget I would assume a lot of the areas are already axed because of price point.

Thanks!

Seeking those San Diego BP members.

I have a friend that lives in San Diego and works as a social worker for the County. She is interested in buying a condo in San Diego County and needs some guidance from a good 1st time home buying agent and lender. Any recommendations on a solid real estate agent and mortgage lender? She doesn't have the biggest budget and I'm sure she is going to go with an FHA loan. Any help is appreciated!

@Steve Priola

Can you tell us more about the deal?

I'm not really sure I want to add to this thread but here it goes....

I think I'm in the opposite position right now. I can afford a nicer car however I'm trying to be very careful with an upcoming vehicle purchase. Since I transact business in the Midwest (and was born and raised here) most of my investors or potential investors are extremely conservative people. I'm worried that if I even jump up to the "Mercedes" level that I will look like a jack a** to my investors. Which I completely don't want. Most of my network consists of conservative Midwestern people who would be completely turned off by such a purchase (Lambo). Possibly later on in life after a massive amount of success has been achieved but who knows. I always wanted a black Ferrari...mainly after I purchased a used black Honda Civic out of college. I use to call the black Civic my black Ferrari. It cost so little to maintain and it's still on the road (sold it to an employee).

Like @J Scott I like to enjoy my life however always maintain a healthy balance.

Do you think the landlord got a hold of the tenant and closed his BP account? I hope we don't hear about this on the news.

@Ted Akers

I've used a Serum product called Serum SR. It did a decent job at removing the soot and smoke damage. Their initial product was a hydrogen peroxide based chemical used for mold remediation. When I first used the mold product we were doing a very large mold remediation project on a 300 all suite hotel in Chicago. The rep came out and trained our workers on how to use the product and gave us a demonstration before we even made our initial purchase. You might want to reach out to the sales rep in your area about the SR product for smoke damage. They could probably do a free demonstration depending on your location to the rep. I've only used Serum SR so their could be better products out there however it seemed to work okay. We've been through both winter and summer without any tenant complaints.

@Cory E.

What's the age of the property? If it's an older building and hasn't been properly rehabbed then you will need to account for either a higher amount of initial Capex or continued maintenance and capex which could zero out the cash flow. On paper the deal looks great however there are plenty of deals priced at 20k/door that don't account for the 10-20k/door needed in rehab to properly get the building in good operating condition. Your city/county could also have a different set of building codes for buildings above 4+ units.

Also how is the location? If it's truly a solid C area with a good rental market then you might have room to do a substantial rehab. Depending on the current HVAC you could also separate utilities.

If you don't already have a good relationship with a local bank then start connecting with as many as you can. Talk to the commercial brokers in this space. They will know which banks are doing deals. Ideally you could get the rehab costs wrapped in the loan. Plan for 25% down (after repair value) plus reserves.

Either way I first spend my time figuring out the true condition of the building and verifying the location quality. Good luck!

@Patrick Yungck

I like it! Welcome to BP and I'll see you around the forums.

@Brian Anderson

You are getting some good advice from @Bill Gulley and @Steve Babiak but I will expand or condense a little:

• Get the property under contract with the proper contingencies in place and ample time (if you can). If you can, I would go for a 60 day financing contingency with a 90 day close.
• Then get your leases lined out like Bill stated. Are the prospect tenants national or regional companies? Or are they new businesses?
• Call as many local banks as possible to get their appetite for this type of loan. Get referrals from commercial brokers, investors, commercial insurance brokers (they add mortgagees on to policies), etc etc. Compile your top 5 based on conversations and appetite level.
• Figure out what your real rehab costs are going to be...get your inspection, speak to contractors, and formulate a really good "rough" budget. Your numbers look great on paper however they also look too good to be true.
• Start putting together a basic executive summary or business plan for the property. It doesn't have to be complicated however it should outline the existing property, your plan, rehab scope, pro-forma financials, and background/experience.
• Send your top 5 banks the deal via email and follow up via phone. Have lunch with the top 3 banks (if 3 still have the appetite). Some might have appetite for the finished product and some might be interested in the A&C loan (acquisition & construction). You will know from this conversation if you need to start reaching out to private lenders. I would stay away from most HML because of the short nature of their loans. It might take you 18 months to refinance +/-.

Also I would be connecting with other players in this product type for guidance. Cash reserves needed are higher in commercial than residential. Tenant improvement costs and leasing fees can add up quickly. Just make sure you are seeing the full picture. Good luck!

@Patrick Yungck

I feel you....however in my market sharks are all over those opportunities. Everybody wants a turn around or rehab project it seems like. "Distressed" properties are selling at premiums. But I agree...if you are creative you can find that deal and make it work where others can't. Welcome to the wonderful world of multi-families! What type of commercial RE did you specialize in?