All Forum Posts by: Adam Smugala

Thanks for all of the questions/concerns.  There is a lot to take into account with a deal this size, and its becoming clear that to get into something this large, I need a much larger cash position.  The reserves are something I was not taking into account, which is a big deterrent even with owner financing.

It sounds like I need to step back and down-size my expectations for being a smaller investor.  I've been in pursuit/learning for the past two years, and I own one property already, so I have a decent understanding of the ins/outs, but apparently not at this scale.  I know there are stories of new investors accomplishing big feats like this, but I also know it's rare.  Thanks all

Hey BP crew. I'm a newer investor (I currently have one SFR). I recently found a large duplex package deal, 14 buildings 28-units located about 3mi from where I live. The asking price is $4.5m which I think can be negotiated. Being that I'm not flush with cash, and the dp on something like this is ~$1,000,000, What are any suggestions on creatively making this deal happen? I know all of the standard answers:
- find external investors
- be rich
- syndicate
-bla bla bla

I have a business partner and and combined with we can come up with $200,000-$300,000 which I know is a drop in the bucket here, but what (if any) creative options could there be to work with the seller in some sort of seller-financing deal?  I was told by the listing agent that the seller may be open to seller financing, but I also know a seller want's to get there money.  So in this case, the down payment is my giant to conquer.  How have you guys handled this kind of deal?  How do I "use other people's money" without getting into a web of ownership/complexity?  Maybe I just have unreal expectations and I should keep my head in the sand :P.  Anyway, interested to hear your thoughts and to learn.

@Brian Garrett thanks for the correction, yes, gross rent is around $4,000/mo which makes the deal unacceptable for long-term rentals.  Sounds like I'll have to offer waaay less and see if they bite or walk away.  Thanks team.

@Mason Hickman I don't like the idea of weekly short-term rentals.  It attracts "shady" people and the local community would rather see it be converted to more long-term renters.  The problem is these are all 1b/1b and the local market only supports rents of around $500/mo for 1b/1b.  That brings the cashflow waaaaay down (around $4,000/mo ) which at a $600,000 price tag makes the cashflow almost negative.  But because of their current cashflow, I suppose the can command that level of price.  That price only works if the current "hotel-style" renting stays in place.  

Hey BP community,

I have came across a possible 8-plex for sale, which has a unique history, that I need some advice on.
The building has 8 units with 7 of them rented weekly and one rented monthly.  This is obviously not ideal for a long-term buy-and-hold but I got the financials and the dang place cashflows like a boss.  Over $8000/mo after landlord-paid utilities.  So it's basically a weekly hotel.  I know this comes with it's own garbage bag of problems (lots of cleaning for the weekly turn-over, not as stable income, possibly some lower income people floating through there, etc).  This building is constantly filled from what I was told.  It has a hefty price tag, I assume because of the cashflow.  The owner is asking $599,000 which I think it too much and wouldn't pay that.  Any input would be great.

@Bonnie Low My DTI is pretty low (28%)
I put the 20% down on my primary to reduce PMI (this was also before I wanted to get into investing so I was only focused on reducing my monthly payment)

I have several 401ks totaling around $50,000

We are planning on staying in this current house long-term so FHA/househacking isn't an option

If I could get 100% financing through a HML and BRRRR that would be amazing, I just don't know where to find said HML

I didn't think about partnering with my parents for a second deal, but that might definitely be an option.

I'll check out Brandon's book.  Thanks for the input.

Hey BP community!
I'm a new-ish investor, looking to build wealth through investment properties.  I've been doing lots of "window shopping", figuring how to build the business, etc. and getting to a roadblock on financing (the elephant in the room).  Here is my current position:

-I have a full-time job, making $80k/yr (single income, wife and three kids)
-I bought my primary residence 1yr ago with 20% down (so minimal equity)
-I partnered with my parents and bought the neighboring property that was split off my property and it currently has a renter in it
    -this property cash-flows but not significantly due to the renter paying under market-value to the previous owner and she is a friend, takes care of our kids, etc, so we want to keep her there.  Acquiring the property was more to secure the property and not have neighbors.  My parents may buy it out long-term, freeing up my capital, but that is TBD
-I have no other debt other than my house and the rental
-780 credit score

With that said, getting financing for my first "real" investment property feels daunting. Since I bought my house and the adjacent property, there is very little equity to pull out of either property and buying both took most of my cash. Being single income and with my expenses, I can't save tons of cash and it would take years just to get a down payment. I'm looking for advice from this large pool of professionals on what my best option is get my first deal done. My investor pool is quite small, I've considered personal LOC for a down-payment on a conventional loan (not sure this is even feasible). Any input for a lowly first-timer is greatly appreciated.