All Forum Posts by: Tristan Gardner

@Mitch Jones I'm sure you have your goal so work backward from there to determine your next steps. For example:

Goal: I want a small apartment building that grosses $54000 annually, leaving me with roughly 20k pure cashflow.

Property target: 6 unit 2bd 1.5 bath B class that rents for $750/unit. Here's our $54000 assuming 100%vac (let's keep it easy here)

I'll assume a 3.5% market cap (I feel that's an average for not-so-big cities in our states (I'm from central Ohio). On 54k gross, I'll guess an NOI of 30k. To find my purchase price, I'll divide my NOI into my cap: 30000/.0035. I've got my rough purchase price of 857k.

I need 25% down on this commercial property, so ~214k and 6 months of reserves, ~15k (annual is ~30k).

Now, what do I need to do to get 250K (214k down payment +15k reserve + 20k for fees, earnest, stabilization cost, all the other little stuff, etc).

This is how I look at "how much do I need" and "what do I need to do next" questions. Brandon Turner defines this as MINS or most important next step. It kinda talks about it here, but super heavy in his Intention Journal, linked here. Highly, Highly, Highly recommend and it's on sale now. 

Coaching / mentoring is a great path for the right person. In my opinion, you should be able to comfortably afford the program before starting it. In my experience, when I paid for a mentorship program, I didn't really learn much more than I knew before starting, but I did get my butt in gear and actually deploy action to make my goals come to action.

Additionally, the networking that takes place during these events is very valuable, if used correctly (or at all). Putting myself in a position to talk with like-minded people with similar goals, objectives, and beliefs and allowing them to also hold me accountable for what I say has helped me grow. Even just being in a position where I have to represent myself and communicate effectively is a major growth mechanism.

If you're mindset it right and you can deploy the time and action required, pull the trigger Wes! Best of luck brother

Can you line up the 5+ units before you start the 1030 process? This typically works only with off-market deals. 

You could have good luck getting in touch with a local club and picking up a property from someone there.

It could be a good deal if the interest rates work out. If you (or your entity) assumes the mortgage you will have to qualify for it. Generally speaking, interest rates have fallen over the course of time so it may not make sense to take on the previous interest rate long-term It may make sense to use the assumed mortgage as a bridge until the asset is stabilized or improved, then refinance to save on the fees

Five ~100 units deals. I'm in the northern Columbus Ohio area and this would be able to cover 30% of the each building as a DP easy and generate easy mid six-figure gross monthly 

$100 isn't too much of a difference. Also remember your potential costs to turn the unit should you lose the good tenant.

Less headaches may be worth the loss of ~100

@Paul Deliso Yes, that was a typo. I meant 300

@Catherine Javier a conventional residential loan cannot be under a LLC in many organizations, but a commercial loan on a residential property can.

I'm not familiar with how the tax situation would work with a QuitClaim deed.

There's definitely value to programs like these. However, I don't think there's a to of value at $8500 to a person who's just starting out and needs that capital to actually go out and buy the thing they are trying to teach you to buy. I believe the large value from these programs comes from the others in the program with you. These are the people you can network with to build partnerships and grow alongside.

I'd stay on BP until you have the money to write off $8500, then do it

Maybe try a small bank and/or a credit union in your area that looks at more than just W2 income to validate the trustworthiness of the buyer.

1. You can, but your DP will probably be higher (20-25%). If the LLC is newer or doesn't have many assets, you'll probably have to guarantee the loan personally anyways

2. That's a lot of cheddar...

3. Sure, but you'll probably have to pay title and transfer fees

4. The answer to number 1 will apply here