All Forum Posts by: Chris Winterhalter

@Jeremy D.

You can definitely cross collateralize your single families for the down payment on the multi-family. You need to make sure the bank is interested in the single family properties and area where they are located. Are they close to the 10 unit building? Also you need to make sure you are prepared if the properties come back with low appraisals (from a financing standpoint). Also from a local bank you should be able to get 4-4.75% right now on small multi-families. If they are charging you 7% they are taking you to the bank (maybe not literally...is that a saying?). Good luck!

@Gregg C.

It really depends on the deal and who is financing it. Can you give us some background on the deal? Depending on the deal a lot of local banks might not require an in-depth package however that doesn't mean you shouldn't properly put together a solid business plan, executive summary, and financials. When dealing with CMBS lenders they are going to want to see specific things. In a recourse scenario always clearly have an updated PFS (with certified POF) and 3 years personal tax returns. Along with that have 3 years business tax returns, business balance sheets, property snapshot, and a basic business resume giving your background and experience. In the business plan and executive summary you are going to want to outline the property/project, basic scope of work, improvement plan, pro-forma, project financials/loan request, demographics, history, and business structure. They are also going to want to see all of the property financials (3 years), leases, rent roll, etc etc.

As @Travis Sperr mentioned talk with your banker about what they are specially looking for with the loan submittal. The more organized you are the better you look from an underwriting perspective. Congrats on jumping into the commercial side of the business!

@Karma Senge

What type of deals are you trying to purchase? I know you mention multi-family and commercial but what sub-set of commercial? What property size and transaction size? Like @J Scott stated I would set some very small attainable goals that build up overtime. If you are trying to go from single family properties to 100 unit apartment buildings maybe you need to start off buying some smaller units. Educating yourself is great however nothing replaces getting out there and doing deals. Are you financially ready for the transition?

@Joe Fairless @Kevin Fletcher @Matt Laird @Hummayun Ismail @Account Closed

Thanks for the encouragement! Hopefully we don't run into too many hiccups along the way. I'll keep the thread up to date on closing progress.

Mike S. This is very easy to get around...always get COI's showing both work comp and liability. Have the agent send it over and get added as additional insured or at least in the endorsement line. I always like to have the COI's come straight from the broker or insurance company when dealing with new subs. Just because the CA license site states that they don't have employees doesn't mean they don't have work comp. Something could have changed in either direction I.e the CA license site could state they have employees but actually dropped work comp. Always get verification through a COI.

@Alton Williams

Do you work for a small or large management company right now? A lot of management companies also own, develop, etc. I think if you were to work for a growing management company (smaller) and expressed interest in transitioning over to the acquistion side that you could make it happen. Being upfront about your goals will be very important. You also need to get out there and network...go to conferences and get your name out there. Are you currently a GM? Have you been successful or shown the ability to turn around a hotel? I definitely think that will help. As you know the hotel industry is very small.

@Amy A.

A lot of them probably knew based on lease renewals. Regional and national owners probably had a heads up based on their level of contacts within Family Dollar. One of my best friend's works for one of the largest shopping center owners in the country under national accounts. His main job is to network with the Director of Real Estate for XYZ national retail chain. He's been hot on Family Dollar for the past 4 years from what I remember.

@Amy A.

Your area might not have a lot of listed property. My buddy's family owns a house in Boothbay Harbor Maine that we vacationed at every 4th of July (love it up there). My feeling of most of Maine is that it's a lot of small towns and small networks. I would think the real estate community is really small especially in a niche of commercial real estate. Maybe I am completely off base however your best bet might be to network network network. Good luck!

@Account Closed

I've been in a similar situation several times however somewhat the other way around. We have rehabbed vacated apartment buildings and phased the leasing. For example let's say I phased 12 units in 3 phases of sets of 4. I would fill units 1 by 1 which doesn't always meet specific landlord policies occupancy numbers. I would double up, having builders risk and then adding the landlord/habitational policy as soon as the first tenant moved in...having low occupancy for short periods of time isn't going to lead to a claim denial (in my opinion) especially from a good insurance company. They might try to fight you on a theft claim because most of the units are vacant however builders risk generally includes theft. Are you using Zurich for BR?

*This is not legal advice

@Thierry Van Roy

Don't be blinded by the 30k door price tag, an 8-9 cap is a nice return however it comes with more headaches, maintenance, lower quality tenants, etc etc. There are plenty of sub-markets, cities, and newer properties that are trading well above 100k/door in the US. Even cities and property types that trade above 500k/door+.