All Forum Posts by: Tony Mai

@Matt Popilek what are your thoughts on this as a buy and flip in 2 years. Would this deal make more sense from that strategy?

@Dillon McGough hi Doug the property does not have any landscaping because it’s mostly concrete but will need snow removal. I allocated 133 in back rents owe but with the turn it can be used for snow removal or other misc expenses.

@Rhonda Wilson I agree with you. This area has always been a c area and will remain a c area. Other parts of this city is grown but this particular spot the rents maybe $500-$550 20 Years from now. Where as if I bought in more of the patch of progress. The rents now will increase similar to your apartment back then.

Matt Popilek I wanted to also say thank you and I appreciated your insight on this deal

Rhonda Wilson first, thank you and I appreciate your insight on this deal. The best financing that I could obtain so far is 20% down,5.5%,1pt, and 20yr am for the full 20yrs. It’s from a smaller bank and banker that I have a relationship with. They keep their loans in house. For smaller credit unions, I haven’t reached out to any, but I will begin to do so while I locate the next property. I want see if I can get better terms for the next deal. 30yr am seems to be doable but it will require 25% down and Fixed for X amount of years. Let me know if you have any good referrals for lenders.

Matt Popilek my agent says there are two other back up offers behind mine but they don’t have the rent rolls and P/L from 2016,2017,2018. In 2016 they operated at a Loss... yeah I though this was amazing. 2017 their NOI was $2000 yes the whole year for 2017 due to turn over. So far in 2018 it finally turned the corner and is operating at 75%... so there’s room to get this to 100%. The turn isn’t too bad no to worried about that but long term stabilization is worrisome. Even if I get this stabilized at 100% I am 1-2 vacancy out eating up all the cash flow. If the unit mix and location was a little better this would be a no brainer but at the current price it doesn’t work. The seller wants to sell at closer to retail and it’s currently more at the wholesale stage. If this property was stabilized and running well with a history of low maintenance and low turn over it makes more sense to pay current purchase price. Is was listed for 379k I offered 320k based upon it being 100% efficiently run at 100 occupancy but settled on 333k based upon verifying rent rolls, inspection, and PL which was sent to me after inspections. I do have to stick to my numbers. It is a business at the end of the day. Let me known if I’m on track here or if there was anything I left on the table.

@Account Closed 20yr am was the best I could find.  However there was a second lender that will do 25yr am but with 25%down, 5.75%, and 3 points at closing which I thought was high.  I wish I could get a 30yr am.  Let me know if you have  a lender that can do a commercial loan for 30 yr am.

@Matt Popilek I see your point of view.  Since I want this to be a long term hold.  The increase risk due to the instability of the area made me realize that if this property does stabilize it will have a difficult time with high turn over even if I get rents to market rates.  I agree even with 100/door, it isn't super sexy.  This deal will also take too long to get a check that may never come. 

I went a head and canceled this deal.  I going to try for a larger unit count 20+ and at lease a C+ that is growing or have more potential so there's more up side.  This deal the way it stands does not have enough upside to take the risk.  Thanks for helping me walk through this. 

if you have the money it is worth it. The web replays, leasing forms, and calculators are helpful.

@Lane Kawaoka@Gino Barbaro Hi Lane and Gino! Could I lean on your expertise on this deal?  Is there enough upside to move forward? Any thoughts or insights?  Any comments are greatly appreciated!