All Forum Posts by: Adam Sheren

@Kin Leung -

Go talk to a lender and explain to him/her your situation until you find someone that would be willing to entertain your request contingent upon you receiving the equity from the sale of your current rental. While debt to income is obviously a key factor in approving a loan, I'm assuming you'll choose a property that improves your debt to income ration (because it should be making you money, correct?)

1)For the 1031 to work you will have to make sure your title company is aware that you are going that route PRIOR to getting to close.

2) You will receive NO cash from the sale. The net funds have to be stay with the 1031 Exchange agent and applied in WHOLE toward your next purchase. This really isn't an issue so long as you can find a property in the alotted time frame (45 days to identify as many properties as you may be interested in and 180 days to close on one of selected properties).

Good Luck, sir!

@Richard Biechler - sounds like some great networking has paid off! Keep your phone on - tomorrow could jump you to 75! Keep up the great work. I applaud your efforts and willingness to not shy away from rapid growth.

@John S. - I can understand the NDA but the non-compete agreement is odd. Would't be worried about signing the Non-Disclosure. As for financing, assuming you have a relationship with a Bank, it's fairly simple to get a pre-approval letter for financing. It will just come lined with contingencies. Depending on how you came across the 'deal' you have to understand that the seller won't want to waste his time, effort, and energy disclosing information on the property, providing you a tour, and also giving you his financials to someone who doesn't have the ability to purchase it. Not saying you can't, but just understand where he's coming from. Can't speak too much to anything else, however $875/mo for a 3 bed 2 bath where the median income is $143K seems awful lite. Good luck!

@Virginia F. - I commend you on your willingness to take the leap and move toward you goal without letting anything get hold your back. I agree 100% with @James C. - focus in on building your network. As you progress you will find there are three key's to investing; Criteria, Terms, & Network - and your Network is what feeds you. Spend time contributing and providing value for those who are in the business in some fashion or another and never eat alone (also a good book!) before you know it, an opportunity will be staring at you. The knowledge you can learn as an agent out in the field will be irreplaceable - if your goal is to invest in income producing real estate, focus your efforts on assisting commercial buyers and sellers - perhaps ask for co-listings with an experienced partner as you start out. You'll be able to learn so much by helping others do exactly what you'd like to be doing yourself.

Good luck to you!

@Daniel Johnson - How long is your rehab/stabilization period estimated to be? I ask because I would look at having an easy to follow detail of the time frame a unit will be down for rehab (non-producing) but perhaps only provide it upon request. This is assuming you'll have an annual breakdown showing the investors CoC return and what the IRR will be for that investor's funds over the course of time that moneyh is invested.

Assuming you're only rehabbing a portion of the units at a time, you'll obviously want to structure the rehab in a fashion that allows you to keep enough CF coming in to cover the debt service during stabilization (which should be interest only payments) almost as if you're backing into the figure needed to cover the debt service. 

@Diogo Marques - While all of these calculations are nice to know the two things that a lot of investors focus on are cash flow (cash on cash return) and IRR over a certain period of time - mostly 5, 7, 10 & 15 years. Depends on what your strategy with the property is. Are you simply buying and holding? Do you plan on flipping the property in less than two years by executing a quick value add strategy? Perhaps you're looking at an 18-24 month complete rehab followed by increased rents with a large cash out refinance after 5 years.

Know your market (vacancy rates, crime, jobs, schools, demographics, & cap rates) and focus on cash flow and IRR over a specified period of time depending on your overall strategy.

@Jordan B. - The biggest hurdle you'll face when purchasing your first property is getting out of your own way. Trust yourself and the process, assuming you've done some preliminary reading on REI and are willing to put in the continued effort to consistently educate yourself. The second largest obstacle you'll face is not giving up the first time sh*t gets tough. You'll survive. You have quite the leg up on the majority of investors your age, but you still have to know your comfort zone. Keep enough for a down payment on a home, should that be the route you choose. good luck to you!

@Derek Perez I agree with @Jeff Greenberg. there are several posts that are PROBABLY correct in their advice as far as being able to avoid the SEC because of the nature of your relationship and the better use of other formats such as a JV. How you structure your deal as far as ownership and payouts is entirely up to you too, but just as you would an investment, due your due diligence on how you make/manage that investment. Best of luck!!

@Shawn Connors - Find out what the going rate is of price per unit - Also, have you considered your debt service? Even at a purchase price of $450K with 20% down and a 20 year am at 4.5% this investment wouldn't cash flow.

Are you able to secure 12-24 months worth of interest only payments as you rehab or build the new units? Either way this deal looks awfully thin. Good luck to you!!

Good Afternoon,

As far as licensing is concerned would someone be able to let me know what a licensed Broker in the State of Michigan would have to do to set up a Brokerage and operate in Illinois?

Thank you.