All Forum Posts by: Chris Winterhalter

@Dawn Anastasi There definitely are a lot of religions out there. But I do think it goes beyond that.

@Elizabeth Colegrove We've had a suicide in one our apartment buildings. We've never had a problem leasing the unit. My business partner owned a building where another tenant also committed suicide. He also didn't have issues leasing the unit. I think it depends on the property type and location. We own C class rentals. So nicer single family properties might have more challenges on something like this.

Like @Mike Haro mentioned CoStar would probably be a good starting point.

@Elizabeth Colegrove I forgot to mention I really loved the headline...gruesome murder...who isn't clicking on this thread?

@Dawn Anastasi I can definitely see people having no issues with living in the property however many might...but with that being said what do religious beliefs have to do with it? Like if people believe in ghosts or more from structured religion?

@Elizabeth Colegrove

How big of a discount are you getting it at? I definitely think it's important to take into account the issues that could arise from renting/selling the house. Depending on the neighborhood it could be a really big negative. But it could also not affect the deal at all. Bring in one of those NYC spirit cleansers to rid the space of any evil spirits. It will cost you 5k but I think it would be well worth the cost. In all seriousness I would make sure I am getting the proper discount to allow for any issues.

@Tylor B.

What are you trying to accomplish? You can get general data from the big brokerage companies however a lot of it will be averages by property type, class, and location. If you are looking for this info in order to invest then you need to network with the brokers and owners in town who are actually closing these deals. Pricing is going to change block by block, property by property. You can also shop to see what is available and at what price on the leasing side.

@Joseph Stelly

A clean and easy way would be for him to loan you money with security of a 1st deed of trust and promissory note. You could structure the loan so all interest is paid once the property sells. All rehab funds should be escrowed or held by a 3rd party with draws being made upon progress. Make sure all legal docs are prepared by a qualified lawyer (or at least reviewed) and that either a lawyer or title company closes the transaction with the proper amount of title insurance (lender). 8-10% would be a good return given that you have a track record in real estate. It depends what the investor wants.

*this is not legal advice

I will be out in SoCal off and on for a hotel project we are doing. I would love to get together....I'm available on the 26th and 27th of April.

@Joseph Stelly

There are all kinds of ways to structure this deal. First you need to talk to your friend about his needs in regards to a return. If he is going to be putting up all of the money then you need to have proper structures in place to protect his money.

• How does he want to be involved? Silent or active?
• Does he want to lend on the debt side or be an equity partner?
• Do you have the capital to buy his side out if the deal goes sour?
• Are you willing to lose your friendship?
• How much of your friends total net worth will you be taking?

After you figure out these specifics you need to speak with a good real estate lawyer to make sure you are staying in compliance. Also be very careful of equity investments from silent partners as this could be deemed a security. A lot of small real estate lawyers don't understand securities/blue sky law. Do your research on the structure along with seeking qualified counsel. Good luck!

@Account Closed

Independent hotels are much tougher (depending on location). Also smaller hotels are tough to finance and difficult to operate. You have a set amount of fixed costs involved in running a hotel i.e. general manager, front desk, accounting, reservations, housekeeping, maintenance etc etc. I would talk to small operators in the space to get their expertise. Are you planning on being an owner operator? BP might not be best place to seek advice on this topic. Good luck!

@Account Closed

Building your capital stack for hotel deals...especially distressed product can be very difficult starting out. Are you planning on going after branded or independent hotels? Independent hotels are more difficult to finance. All lenders want to see a proven track record with hotels from the ownership group or at least the management group. Depending on how distressed the hotel is there are a variety of options for financing. The CMBS markets are active along with a lot of other niche lenders in the market place. Local banks are also active in the space however they are generally very conservative on hotels (depending on the lender). Let's say you can get senior debt at 60% LTV....you need to fill the rest of the bucket for financing, capital improvements, FF&E, and any PIPS specifically required by the brand. The other 40% can be a mix of your own cash, investor cash, mezzanine debt, bridge financing etc etc. Bridge and mezz debt are going to run you 8-12% depending on where you go. Every deal is unique however I would plan on raising a chunk of the capital especially for distressed deals. The more cash you have on your side (and the more you are willing to put down on the deal) the better pricing you will get. Get connected with a strong management company with a good track record that can help with the redevelopment process. We have a hotel construction company and really understand that side of the business. Feel free to shoot me a call if you are looking for some guidance on estimating costs.