All Forum Posts by: Todd Pultz

@Nicky Reader good conversation, this is frustrating for all of us. We were not affected recently with Covid and evictions and we feel blessed for that. However, we did take some steps to help. Out of hundreds of renters, we had 2 that tried not to pay due to Covid. We were prepared with local organizations information on a standard form we prepared who were assisting with rent payments. Both tenants reached those agencies and their rent was paid within a week.

This sounds like we need to all be prepared with something like this that we can give to tenants which will allow us to show a judge they did not even jump through the hoops we provided. Maybe it helps, maybe it doesn’t.

Someone said stay away from C class properties. I think actually quite the opposite! I believe that’s what is helped us through as we have all C class multifamily. A large majority of our residents have SSI, SSD, or some sort of subsidy that does not stop during these times. We do have senior living as well and same scenario that they get government checks.

I worry about the A and B class that may not have these subsidies and were hit hard as a non essential worker.

Regardless, I wish everyone the best of luck. Some tougher times may be ahead, but nothing we can’t weather!

@Paul DeSilva still buying in Midwest Brother! We’ve done a 21 unit, 8 unit and 16 unit in last 6 months plus a few land deals we are developing. We’ve always bought value add, so if the numbers worked before COVID they still work for us now. With a lot of our C class, our residents have SSI or some type of subsidy so we were affected very little.

Best of luck to everyone!

@Lance Neighbors we operate a bank account for each LLC not per property. Everyone sets their LLC's up differently, but we usually keep portfolios in our separate LLC's. For example, multiple buildings on a single street might be one LLC. Several SFH's in same area may have their own LLC. We use series LLC's as our state allows it, but not all states do. Also remember that security deposits have to be handled differently and held in a different account typically not mixed with operating funds.

Good luck

@Todd Dexheimer completely agree with you! We do not do syndication. However, you know that not all syndicators follow your lead.

@Jason Ma good job staying diligent! I know that feeling when a property comes back low and feeling of questioning yourself, but you stayed at and got it done. I just had this on 3 triplexes I was refinancing. Appraiser valued them at 68k a piece. Now the positive was he was telling me I was operating well over 20CAP! Lol! But we did just like you and went to a different lender and different appraiser. The second appraiser valued them at 105k a piece! Unfortunately this gap in appraisals with income properties happens all the time! I did find prepping for the appraiser and giving him notes on everything we did along with my own comps I pulled, seemed to really help!

Good job buddy and good story!

@Justin Johnson it is challenging and I learned some hard lessons early on. But @Joe Splitrock said it best. Develop a criteria that you use always and never stray from that. This should be set high enough that you can easily deny those that don’t fit your criteria. Stay consistent to avoid legal issues! You can always make an exception to move some one in, but if you make an exception to deny someone you could find yourself getting jammed up! Good job and good luck!

@Tony Kim this was not a syndication, I think you misread. I was only asking the question about how syndicators scale. There are many ways to structure a syndication, but plenty where the syndicator takes the large loan and the investors carry gap money etc.....the syndicator did not come out of pocket with cash was the point.

Your right, on your first syndication deal 20-30k is roughly the attorney cost depending on the deal, but you can also cover those fees in your offering.

The personal transaction was not a syndication and was just stating how to get into a deal with 0 money out of pocket. We were on the hook for the larger loan on the property. This was simply getting funds from a private investor

@Steve Mandelbaum of course numbers were rounded just a bit for ease of conversation. But let’s get closer to exact. Private lender gave us 31k at 10%, so they were paid back $34,100. Rehab was actually a little over 27k and when I say rehab, this was simply updating vacant units and others as they came open during this time frame. We used collected rents to cover this, so when I say we paid ourselves back, we paid the property back. Yes the private lender gave the money in form of a promissory note and not secured in any way. Once you develop relationships this is very common and not hard to accomplish. And NO the private person did not record a mortgage.

Let's go a step further.....the HML that was on the hook at the time of sell from the last owner who had defaulted asked us if we would use them for the purchase at 6% and 90% purchase price, interest only, so we did not even have to find a lender nor did they make us really qualify based on our experience and portfolio.

We just closed that 16 I mentioned and we had roughly 68k gap to close. That also came from a private lender at 10% simple completely unsecured!

We do this all the time. However, we have spent years developing relationships with individuals and trust. We have never not performed and our network knows this. There are many people on here that do the same thing.

We also do flips in the same manner often. We take HML for purchase and have a private lender give us gap including holding costs. We do a bit better on flips for them and usually give them 15-20% return of net. Only because these are quick transactions.

I lend people private money in the same terms unsecured as well. These are people I trust and who have proven themselves over time.

Don't get confused that private money is from people you don't know. That is usually not the case. HML's are where you go for funding if you don't have private lenders. Private lenders can be friends, relatives, co-workers, other investors or anyone you developed a relationship with.

If you inbox me, I would be happy to chat with you and pass my cell # to you and give you REAL numbers on multiple properties and tell you exactly how we do it. I can share with you a property of 31 doors split across multiple buildings on same street that was bought owner financing with 0 down 6 years ago for 500k and paid off through the rents. We picked up another 6 units beside these units in two triplexes. We bought one for $2,500, one for 35k(private lender at 8%). Each took less than 30k to rehab. Those 37 doors just appraised at 1.3 million. We refinanced 3 of these buildings to pay for rehab and pay back private money. Gross rent rolls are just over 20k per month. I’d be happy to show you actual financials on this one as well.

Don’t be quick to be skeptical of anyone on here! There are some really smart people on here that are very successful who are extremely creative. (I’m not counting myself in that category) I have paid attention to those smart people and others alike.

There are so many people killing rehabs in certain areas where they are turning well over 100k on a rehab. I know wholesalers cleaning 20-40k per deal, so I guess I’m confused why you would think forcing appreciation on a 21 unit multifamily by 300k is odd.

@Steve Mandelbaum why would you say this is not scalable? How do you believe Syndications are scaling so quickly? Again, 0 money out of pocket does not mean no money is required.

Very simple example is a recent one we did. Approximate numbers were 295k for a 21 unit that required 31-32k down at closing. We financed the larger amount and brought a private money investor in to cover that 31-32k gap. THIS IS GETTING INTO A DEAL WITH 0 of your own money in it.

We are getting ready to close on a fully amortized refinance 70% LTV. The property now (6 months later) after 30k rehab and raising rents appraised at 650k. So, 70% LTV is 455k. We will pay loan off at roughly 295k, pay private investor off at roughly 31k pay ourselves rehab of 30k back and we will put the remainder which is around 100k in our account.

Then we will use that 100k to acquire more properties.

I can give you several deals just like this over last few months.

We just closed a 16 unit last week the same way, an 8 unit 2 months ago and others just this year.

Being creative with financing is absolutely scalable!

@Javen Bowman good luck to you and yes many of us are absolutely willing to help for free! Just reach out if you need anything and always research anything anyone tells you on here.

Last suggestion, find a real estate professional in your area(a larger professional) and hook up with them. Simply ask if you can work for free for them with maybe some commission! Work hard bro!