All Forum Posts by: Zane Cress

You should check out one of the featured lenders from BP. They will analyze your deal and if needed look at your past deals to determine if you are a stable borrower. You will still have to bring 15-30% down depending on the deal risk and your personal risk to them. You might be able to find a local lender near you and meet them in person as well. 

If the owner is open to hearing options then you can lead the way with your terms and balloon structure and see how they feel about it. Negotiations can go from there, but start with something very favorable to you. Use an online mortgage calculator to get an amortization schedule and present it with the offer. Maybe something like this.

I will pay X with a down payment of Y. The loan balance will be amortized on a 30 year term with a 3% rate. I will make Z in mortgage payments every month based on this amortization schedule. In the first 5 years you will collect lots of interest, and make more money than the actual purchase price because you, the seller, are now acting as the bank. You will also have the monthly income like owning a rental property. The tax bill will be spread out because you are not collecting all the money at once. You can plan several years in advance what to do with a large sum of money I will pay later. At the end of a set number of years I will pay you in full the remainder of the loan balance which we can track with the amortization calendar.

Probably need to seek a lawyer and have them write up an agreement between all of you to set specific rules on this investment group. A good operating agreement would be a must. One person can ruin this for the whole group, and some friends who have gone down this road are no longer friends. You could all be equal owners in an LLC and contribute start up cash with specific rules on payback timelines and then distributions. Does everyone have equal votes? Does someone contribute more cash and another more work? You probably need to find a good DSCR lender or everyone is going to have to provide tax records and all that stuff to get a loan.

How long would it take to get a new tenant and what's the cost associated with that vacancy? Maybe you would be better off lowering her rent to $1100 on a new lease for 6 months and getting the guy off of it. Are you having any success chasing him for rent? She can plan on moving out in 6 months and you can start lining up a better tenant but still get paid without too much vacancy. If you had to take all this to court you would probably be wasting time and money. If you can make the best out of it and still get some money that would be ideal. 

Inflatable airplane slide. Compact and super fun when needed. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Athens.

Purchase price: $775,000
Cash invested: $250,000
Sale price: $950,000

Opportunity to buy a great house well under value. Difficult to appraise because there were no comps in the area. One of the few multi family properties in this SF neighborhood that had gone up for sale in the last 3 years. 3 story on a large lot, 1952 build with great bones. Had to close with hard money on a 6 month note from Easy Street Capital. Completed reno work in 2 months and had all 3 levels rented as midterm. Closed refi in September after 3 appraisals to get correct valuation.

What made you interested in investing in this type of deal?

Great location in the best neighborhood.

How did you find this deal and how did you negotiate it?

On MLS for months. Negotiated with seller for a long DD to complete a 1031.

How did you finance this deal?

Hard Money first then a refinance.

How did you add value to the deal?

Paint, floors, bathrooms, general maintenance, landscaping

What was the outcome?

Fully rented and refinanced

Lessons learned? Challenges?

Unique properties can be hard to appraise. Have multiple funding options in the works because one might fail and you will need the back up to close on time.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the RE professional. Easy Street Capital was able to close the hard money acquisition and Regions worked the refinance.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Athens.

Purchase price: $775,000
Cash invested: $250,000
Sale price: $950,000

Opportunity to buy a great house well under value. Went under contract in January when the market was soft with a long DD. Sold 4 small properties to 1031 into this large triplex. Took 4 months to sell and close. Difficult to appraise because there were no comps in the area. One of the few multi family properties in this SF neighborhood that had gone up for sale in the last 3 years. Had to close with hard money on a 6 month note from Easy Street Capital. Removed the fraternity that was staying in the house early with mutual agreement and started turning the house from the third floor. Completed work in 2 months and had all 3 levels rented as midterm. Closed in September after 3 appraisals to get correct valuation. Big issue I didn't think about was the difficulty to appraise with no comp sales for multi. Final appraiser remembered that when comps for exact property type do not exist they can opt to value as a SFH and justify value. Got us where we needed to be for a refi with no extra money in from Regions. Plan is to convert back into SFH one day and double the valuation by moving it into its highest and best use.

What made you interested in investing in this type of deal?

Great location in the best neighborhood.

How did you find this deal and how did you negotiate it?

On MLS for months. Negotiated with seller for a long DD to complete a 1031.

How did you finance this deal?

Hard Money first then a refinance.

How did you add value to the deal?

Paint, floors, bathrooms, general maintenance, landscaping

What was the outcome?

Fully rented and refinanced

Lessons learned? Challenges?

Unique properties can be hard to appraise. Have multiple funding options in the works because one might fail and you will need the back up to close on time.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the RE professional. Easy Street Capital was able to close the hard money acquisition and Regions worked the refinance.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $775,000
Cash invested: $250,000

Great deal on a property people were afraid of.

Anywhere decent in GA is .7-.8. Anything worthwhile in Athens is the same. Can find stuff down in Macon that is 1% but you will spend sooooooo much money on repairs and chasing rent it won't be worth it. Buy good properties in good neighborhoods and after 3-5 years of rent growth you will hit 1%.

How old are these properties? Are they owned out right by a single person or a family? Would they seller finance you for a few years while you improved the numbers? If someone just bought these in the last 5 years I would not be interested. If it's a long time owner I think that works in your favor for negotiating. You should enlist a good commercial agent to help with this. Maybe look at other storage units for sale or that sold in the last few years and enlist the help of those agents to guide you.