Newbie From SF Bay Area

[Dan Gallegos]

Hi Everyone,

I discovered BiggerPockets a few months ago and I finally got around to posting.

A little about myself:

My interest in real estate investing started when I was a Mortgage Loan Officer for a major bank. I have since left the mortgage industry, but my wife and I have been planning our entrance in real estate investing for a couple years now, and we finally did our first deal.

We always envisioned owning several multi-family properties but an opportunity presented itself that we couldn’t pass up.

My wife was a preschool director, and we had an opportunity to buy a preschool. The transaction consisted of two parts; the business and property. We negotiated an owner carry lease option agreement for the property (with the help of a lawyer).

The basic terms are:

·Lease period of 5 years

·All lease payments from years 4-5 will be applied to the down payment

·10% down (due after lease period)

·4% fixed interest rate

·Loan is due 15 years after lease (payments are calculated using a 40 year amortization)

·The purchase price of the property will be based on independent appraisal(s) in 5 years, not below 750k, and not exceeding 950k.

The business is doing far better than expected, and we are now looking for a second school to handle the overflow. I have found some commercial buildings close to our school that are ideal. Since my experience has been with residential properties, I look forward to everyone’s advice.

Thanks in advance for all your comments!

-Dan