All Forum Posts by: Marc C.

A single private mortgage with one person who understands real estate risks and rewards would probably not involve the sale of securities. If you were raising funds from multiple people for a "blind pool" of money to be used to fund various mortgages, however, would be a different animal. 

You have the names of the heirs or the probate attorney? Skip trace? I like www.tlo.com, but there are many. 

Have you consulted a probate attorney for advice? What do probate records show for the names and addresses of the heirs? 

Where is the property tax bill getting mailed? Are the taxes current? If so, someone at that address is getting the tax bill. 

Tons of books on property management and landlording on Amazon. BP has one, too. Each one gives a tip you hadn't thought of. 

One way to learn how others are do it is to grab some deals from the crowdfund sites. I regularly read the deals, PPMs, LLC agreements and subscription agreements from the listings on www.crowdstreet.com. It's helped me to really learn how most operators work. Most of the deals are very similar; paying a 8% preferred return, followed by a profit/equity split of some kind. (The terms seem very "sponsor-friendly" in a lot of cases.) Goal seems to be an IRR of 20% so you can tell folks they could double their money in 5 years or so.

Why are we discussing this in an apartment INVESTING group? The OP was about qualifying for a rental; we have another forum for renter issues. 

Don't assume Section 8 is a bad thing. You can usually get higher-than-market rents for the property. If you screen the tenants as you would anyone else, you should do fine with Section 8. 

How about instead of going with a consultant, you retain your own CCIM broker to represent you in a transaction...you don't have to use the listing agent. 

Which multifamily books have you read? Have you attended any courses?

Unless it's a class A property, that's too low of a cap rate (too high of a price for the NOI). And yes, debt service comes AFTER the NOI on the Annual Property Operating Data form.

What is the condition of the buildings? That is a major factor for value/cap rate. If it falls into C class, you might be looking at a 8-9% cap rate. If it's B, 7.5% is realistic. 

But you also have to calculate your cash on cash return to make sure today's higher interest rates are going to work with this investment. 

Make an offer that works for YOU, justify it based on 2016's numbers. 

So many seller financials are just a joke. At least the "mom and pop" operators I deal with. I care most about the top line number...rents collected and other income collected. Expenses are easy enough to project, and my numbers for maintenance and turnover are usually much higher than the current owner ever spends anyway. I do want to see how their bank statements compare with their bookkeeping file and tax returns. 

Is this your first deal of this size? If so, who cares about the split at this point? Just taking your friend's money and winging it is not being a good fiduciary with this money. If you screw up, you risk being in a nasty lawsuit for failing to protect his interests. 

So I think you may need one more partner...someone who has done this size of purchase, and run this size of operation, before. You can either let him/her invest or give him/her a piece of equity for his assistance. We're talking, potentially, about a $4M property (with leverage). The bank is gonna want to deal with a pro, too. 

And now is the time to talk to banks. And a recommended attorney.