All Forum Posts by: Leonid Sapronov

Abou, one simple answer (of many) to your question is borrow. You need money to buy real estate. If you don't have that money lying around in the form of cash, either convert your other assets or borrow. Or both. If you get a good deal on your first properties, you can refinance them later to pull some money out. Explore seller-financing strategies - many sellers will agree. Borrow from relatives who want to earn more than they get in a savings account. Just make sure you do your homework, assess the risks and do your due diligence. Borrow from local banks. Use commercial loans - the good thing about those is investment property is not deemed a liability in the same sense as your primary residence, for example - if the property you are buying is a money-making asset, you are not limited by your personal credit power. Just a few ideas that come to mind at 8am in the morning...

Nothing sad about it - on the contrary. Liked.

Congratulations! That's awesome.

To add to the syndication and financing questions - did you use a local bank? Was that bank already familiar with the property? Are your investors equity partners and is their share proportional to the amount of money put up?

But your link is broken...

Congrats!

Well, I think the PM should be able to shed some light on the vacancy mystery. Don't give up until you get a clear answer that you are happy with! There's always a reason.

I've never done a seller financed deal, nor have I ever heard of anyone getting a 0% seller financed loan. Not to say it's never happened, but from what I know, if you can get 0% interest, you should consider yourself very, very lucky. With that kind of offer you are giving them very little incentive to finance the property, unless they are really desperate to get out of it (or there is something seriously wrong with it).

Making the seller an offer is really almost an art, especially if you are trying to be creative. You can lowball them, just make sure that whatever price you come up with, there are analysis numbers to back it up. You want the seller to know that the price you came up with is a result of analysis and not just handwaving - they'll be a lot more likely to negotiate with you in that case because you will have specific income/expense items to discuss. Otherwise, you just risk pissing them off :-)

@Sandy Salazar

If the low vacancy rate is really because of the type of units, then it's not something you can change. But somehow I doubt that's the only reason. If it IS the only reason, then what makes you think you can decrease vacancies once you buy the place? You could tell your PM to be less picky about choosing tenants, but that would contribute other risks.

@Brent Shryock

Thanks for the ideas! I thought about calling as if I was a potential tenant - that would be easy. But I like the market survey idea. As long as I am not lying about who I am or my intentions, I think it's a good thing to try.
@Brent Shryock

@Pete T.

Wow, I have no idea how this post ended up in the VA Beach subforum. I posted in the "Local Real Estate" section. Moderators, could you please move it to the Virginia Real Estate forum?

@Sandy Salazar

Interesting dilemma indeed. You got some good advice on how to value the property and it sounds like the main theme is - be conservative. To me, the red flag is the high vacancy rate over the past three years. Definitely dig deeper into that with your PM. It's not necessarily the PM's fault - sometimes the owner refuses to put in money to make the property more competitive on the rental market. However, you should get both the PM and the owner to give you detailed, clear explanations for the abnormally high vacancy. Get both versions of the story.

The main question is: if your PM couldn't keep the units occupied under the current owner, what will have to change to keep them occupied when you take over?