Throwing it out there, What would you do?

Buying & Selling Real Estate
9yFollow

Throwing it out there, What would you do?

Zachery Buffin
Investor · Away · Member since 2017 · 167 posts · 131 votes

Alright guys, I like analyzing deals and this one is a doozy, this guy wants out desperately and I might take it honestly. I have no assets or teams built up in Florida but that is not an impossible hurdle. I think newbies get scared of these monsters and of all the reasons why it won't work. Just to help get your mind to exercise a deal in a safe space with real numbers I will post this here. Also I might learn something myself which is always the goal, so here is the set up...

I have a line on a 8-plex in Florida for 140k if I don't try to underbid (which of course I will and expect that they will take my initial offer of 100k) but lets say that I do pay the 140. What I can assume here is that I need to completely remodel this beast if not outright tear it down and start over, the estimated repair costs are 120k. The after repair value is estimated at 400k. The average rental in this area for efficiency or one beds is over 1000 but lets say 900 for being conservative. 

What I want to know, or I guess the discussion I am trying to create here, is what would you do with the property if you found this deal right now. The constraints are as follows, 1) you have no money in hand, no liquid assets. 2) You have never done a deal in the area so hard money is a little harder 3) You have no team in place. So how would you go about securing the deal, what would you do with the property once you got it, what would your exit strategy be?

0Reply
19 views

3 Replies

Jump to latestLatest
  • Filipe Pereira
    Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Zachery Buffin Peronally, I would IMMEDIATELY start networking to find someone who has "been there, done that", and offer them X% of the deal for them to coach you through it. Remember, 50% of a deal is better than 0%, or even worse, a deal gone completely bad.

    My exit strategy would be a cash out refinance, look up what the BRRR strategy is.

    0Reply
  • Zachery Buffin
    OP
    Investor · Away · Member since 2017 · 167 posts · 131 votes
    9y

    Refi for commercial is a bit different but the BRRRR strategy isn't impossible here. But I think you misunderstood the idea I was trying to foster here. You're not wrong at all, I just was putting this up here as a kind of interactive find a way or make one kinda thing. As to actually doing the deal I am having people drive to the property and get me some more information before I move. The restrictions I placed were to get people thinking, they are not really my restraints, I just wanted a place where people could see a deal that they might otherwise pass up because they believe they can't do it when it is in fact very doable.

    0Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    9y
    120k on a complete remodel of and 8 unit? Where did you come up with the that? This might not be a good deal after you get estimates. I'll second the partner route unless rehab is 400 (50/unit is cheap for a gut), but you'll likely have to give way more than 50% since you have no money or contractors. Probably 90%, but that'd still be good learning experience. Good luck!
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free