All Forum Posts by: Chris Winterhalter

@Karen Margrave

I was just curious in relation to the accuracy of records from Prospect Now vs. Loopnet. Many times property records are not extremely accurate in Loopnet like they are in CoStar. Especially in relation to mortgage information (hence pricing).

I would use Prospect Now for hotel and multi-family owner information for mailing lists. I might be better off getting my records from the title company or list source though. Any thoughts?

@Karen Margrave

How's your experience been with Prospect Now? I would imagine that you were a Loopnet user at some point correct? If so any comparisons that you can make? Thanks!

@Ryan Nelson

Welcome to BP Ryan! What are your goals? On your bio it lists that you want to own a 15 unit luxury complex. Do you like the luxury rental market? Are you investing in Columbus, IN? If so what do luxury rentals look like in that area? Do you believe the luxury market will appreciate much more than other classes of rentals? It's not very often that you see someone going after the luxury rental market in a smaller midwest town starting out. However I'm not saying it can't be a great niche. Let's glance at the numbers for a second...

Let's assume you get $1650 per unit (utilities paid by tenant) for an 8 unit complex (you mentioned you can get both sets of units for 1.1MM right?)

$1,650 * 8 units annualized is $158,400 less 50% operating, reserves, vacancy etc. (this will be less especially during your first 10 years and you may even run a little less depending on your tenant retention). But lets assume 50%....NOI of $79,200. Let's say you value the area at an 8 cap. The building would be worth 990k. If valued at a 7 cap it would be worth 1.13MM. So at a glance you might not have a lot of room at the purchase price they are asking (which is typical for new construction right now). Is the current building fully leased? How long did it take to lease up? You could always buy the first building with an option to buy the second depending on how the land is plotted out. Like @Karen Margrave mentioned you probably don't want to get into the development side of the deal without any experience. You might also want to see how much wiggle room the developer has on the first building. If you could pick it up for a lower price point it might make more sense.

Good luck!

Chris

@Alexia Mihalitsianos

Welcome to BP!

I know of none unless you are in the private lending space with a good track record and the proper contacts....so private money would probably fall in that category.

Fannie, Freddie, and HUD have great non-recourse financing available but it's mostly over 5MM and it's certainly not a no doc program.

What type of loan size are you asking about?

@Joe Santiago

Is the property in a war zone? Is it located near you or closer to East St. Louis or in St. Louis?

Does the seller have verifiable tax returns and financials? What is the current occupancy and what type of leases are the tenants on? What is the seller's screening process?

How old is the building? If it's a 100 year old brick building with a lot of deferred maintenance you might have to come up with a lot of money for capital improvements.

If you are just wholesaling it...and the numbers are correct you shouldn't have a problem making a decent spread quickly.

@Audrey Truesdale

It really depends on what your niche and strategy are however I would shoot for 720+. Good credit always comes in handy no matter what you are doing. If you are applying for conventional bank financing it will become even more important. However if you are wholesaling properties and using private funds it might not be utilized on a daily basis.

You never know when you will need to use your credit. For that reason I think it's important to keep it high.

Good luck and I commend you on turning your credit around!

@Yee Yonfai @Brandon Turner

It's an area that everybody struggles in no matter the skill level. Billion dollar projects are over budget just like 100k projects. Experience and planning can really help you succeed however you just have to plan for proper contingencies. What can go wrong will go wrong. Being creative and ready for the storm helps separate the men from the boys....or the women from the girls.

This is also why rehab flips require great skill.

@John Zuch

How much cash do you have to put down on the deal? Do you have 6-12 months cash reserves?

You might be better off going the creative financing route like suggested by @Bill Gulley if you don't have a sizable downpayment available. Can you post more information about the deal including financials? Does the seller have a solid history of financials i.e. 3 years +?

@John Zuch

Connect with the brokers who handle these smaller types of multi-family deals. They know what local banks are funding these. From there I would call every local bank and credit union near the prospective property. Connect with the person in commercial lending which you may be able to find on the website. Be completely upfront with them and get them to be frank about their appetite. Make sure to ask them how many deals similar to yours have they closed in the past 12 months. This is important...many will say they are lending on multi-families but when you get down to the details they are actually not an active lender. It also helps to pledge 6-12 months in reserve cash to their bank. More than likely this is how it will go -

-Call 20 local banks/credit unions

-10 will lend on your type of deal however of those 10 - 5 will only lend if you have a previous relationship.

-Of those 5 you will send your executive summary (or deal summary), financials, etc and 3 will get back to you.

-Of those 3 - 2 will offer you a deal.

-Of those 2 deals 1 will actually be a decent deal.

It may go completely different than the scenario I laid out however breaking into that first 5+ deal with a local bank is difficult. The 2nd and the 3rd are much easier. Good luck!

@Bryan Hancock

Great article...you have to be at the top of your game all around when you syndicate. Transparency is so key...

Thanks for the post!