I landed my first deal, now what?

[Jen Allred]

Hi my name is Jen I’m a newbie to real estate investing I’m struggling with getting myself out there and feel intimidated. I fell into a deal, triplex seller finance $310,000 6% over 30 years $20,000 down escrow payment $1572/month. All units need updating and empty right now my question is what now? What are some options for raising the funds to finish out the property? It’s a rural river front property and main highway exposure is Airbnb a good option? What are some other ideas for income? In my area long term renters will just make the payment and overhead. Should I refinance and pull as much out as possible for my next deal? Help

[Michael Lee]

Hello Jen!  You may have come to the right place to learn and ask questions.  The more you learn you will hopefully gain confidence with it.  If your primary Lender allows second financing you might approach a Private Lender let you borrow some other money.  If he did the purchase contract that eliminates that possibility but hopefully he did not restrict that.  You could try to get a "cash rich" Partner that would help you out.  Depending on his involvement other than providing the cash you need and it will probably effect his profit split to do the deal.  It will probably be somewhere between 35 and 50% but something is usually better than nothing.  They usually have an interest rate a little higher than a bank but they are typically more ready for negotiation.  They will usually look more at the project more than you.  With the current income is o you will probably get most offered from low ballers.  

One of the worst Lenders maybe a Hard Money Lender.  They probably have the highest interest rates and charge points.  The previous owner may lend you that money.  Just ask him or her.  If you have purchased a good deal it will usually make another loan easier.  Hopefully, there might be great demand for that location and you re thinking long term.  I hope that will make it easier to deal with.  I think the upgrade of the units pays off and probably make it more fruitful on a refinance loan.  If you decide to keep it you might need to work on your master lease items that includes all of your rules.  I would talk to your area's competition and see if your plans on upgrading needs might need to be revised.  One source you could get a lease form from a local apartment owner and manager Association.  They help protect your legal rights. Another thing you could do is to prepare a scope of work for each unit and acquire bids, ideally 3 on each item.  Shopping materials and labor costs from different places usually pay off.  It sounds like you got a pretty good deal from the owner.  Make sure you are charging market rent for that area.  I'm 61 years old and have about 30 years of construction and real estate experience.  Good luck to you!