First Major Deal in the works...11 property portfolio.

[Donald E Appleberry]

Hey everyone!

So, I'm in real estate in San Diego with Discher Group as a soon to be agent. Passed all the tests and what not but I've been on hold for a while due to a ticket from 2015. Wild. Anyway, I've been working with someone who brought me this deal. 10 residential units (8 SFR/2 Duplexs) and a commercial property not currently in use. The commercial is along the lines of a dentist office or local attorneys office you'd see in a midwest town. Now to the issue.

These properties are coming from a long time investor who's doing a 1031 from OH to SC. They've managed them well and the properties are good rentals with LONG time tenants. Most over a decade. Rent's are under market but I'm not sure it'd be worth raising them at the cost of losing good tenants. Still looking into it. The 2 duplex's are section 8. I was redflagged immediately but after looking at the units and their tenants its all good. They're asking $1M, and we haven't done the appraisals, but looking into it I think its worth just a hair over that without even tying in the commercial property. Like I said its not in use so there's no rental income from it currently. The rest however, generate $11k-$12,500K a month in gross rent. I won't have the exact number until after Christmas. They have lives too so they're just very busy atm. I've secured 80% funding from private money to include any repairs if I decide to BRRR any of the properties. I'm going to use a new LLC once we are under contract together and purchase through it. Now that the wave tops have been hit, here's my problem. In order to use the private money I've secured I need to come up with the other 20-25% (obviously) and since this is my first large purchase I don't have 250-270k lying around.

I've put together a business plan for the LLC and this buy and am looking at getting the 270K through an SBA loan.(270K is the number I came up with including the initial appraisals and inspections) The portfolio will cashflow day one and cover all expenses easily so the only issue I see them having is that I've never taken on this large of a deal. The other 2 deals I've done were in Springfield, MO and were seller financing. Went super smooth and was pretty simple. Anyway back to the issue at hand, The first SBA pre approval I talked to would approve me for 100k only since that was their cap. (Was not aware when we first started talking) So I know I can at least access that. I have about 60k I can leverage through my personal funds and credit lines if needed. But I'm still falling short and I don't want to miss this deal.

Like I said I did a business plan over the area and appreciation, job market, owner vs renter ratio, and initial cash flow is all really good. Is there another route I can take to secure this deal I'm overlooking or don't know about? I've been looking at partnering with someone who can close the gap, and if you're interested hit me up and I'll send my numbers and overview. I wanted to play this one close to the chest and find a way to cover it myself, but 50% of a deal is better than 100% of no deal. I know there isn't an insane amount of info here but any feedback or advice would be appreciated. 

Thanks in advance,

Donald Appleberry

If you're interested in potentially partnering here's my facebook to see numbers and overview. https://www.facebook.com/Donal...