All Forum Posts by: Andrew Taylor

Okay, I hear what you're saying. Just to be clear, it's not necessarily that you think the deal is bad, you're just unsure of my ability to complete it successfully.

As a guy with no track record, I can't really fault you for that stance. But I can disagree with you and try to prove you wrong :-)

Thanks for your continued support, Wes. 

I didn't mean that $100k was too big a number for me to be comfortable with. I meant, $100k, while less than the 20% the bank wants, is still $100k more than I have access to.

And I don't need $2.6M; I need $700k and am projecting a 278.1% return on that investment. Even if I'm off by a factor of two (or three, for that matter), if you can't see why someone would find that an attractive proposition then it's probably a good thing we're not working together. 

Had a good, if busy, day today. Met with the banker, who seemed impressed with the deal and indicated no problem with investor-sourced down payment; my only out-of-pocket expenses would be the appraisal.

Then met with an accountant I liked and got on-track to have the books professionally kept. 

Accountant referred me to her attorney for entity formation and general counsel. The attorney advised me to set up my own LLC because of the simple nature of my requirements, but also explained when I should get back in touch and let her take over.

Finally, I spoke with an insurance guy and am getting a firm quote to update my numbers with. 

Tomorrow I'm meeting a second insurance broker and then looking for a property management company. I hope to have most of my ducks in a row by Wednesday's meeting. 

She's actually meeting with the University about the leases just before she meets with us, so I'll have more info Wednesday.

I included the management fee in my numbers above. I don't think the current owner is using a professional manager, but I also don't think I'm smart enough to do it on my own the first time.

Actually I found it online on one of the listing sites, and I think I called the day it was listed because she hadn't even had time to put the financials up and mentioned that she was surprised at how many info requests she'd gotten. I'm sure I'm not the only person she's talking to, and there's a good chance the deal will get sold right out from under me, but you don't win unless you try, right? 

On the plus side, we spent an hour talking and seemed to really hit it off well. My wife and I are meeting with her Wednesday to tour the property and to discuss it and some of her other businesses she's interested in handing off. I've got my fingers crossed that it's just one of those fairy tale deals you hear about from time to time - you know, "I bought my first house for 8 dollars and just sold it to Adele for 400 million." 

I'm not betting the family farm on this deal working out, but it sure would be a nice one to start my career with. 

@Roy N., I've been to a couple of meetups locally, but nothing since finding this deal a few days ago. I can certainly add them all to my calendar if that's what it takes.

How would you suggest I go about approaching / presenting the deal? With a pretty printout in a clear report cover? A simple, one-page synopsis with some supporting numbers? Or just a conversation/elevator pitch with a business card?

I'm obviously completely new to raising financing, so I'm just not sure what's appropriate and/or expected.

Okay, so I've located what appears to be a great deal (see my post on the deal analysis here). I've got my wife's buy-in, and in fact she is taking a day off this week to view the property and meet the seller with me. I've spoken at-length with the seller, and (for what it's worth) we seem to have really good rapport. So far things are looking good.

I've analyzed the heck out of the financial data and I'm pretty comfortable with it. I've spoken with a local institutional lender and gotten a summary of his loan terms. Things start to get tricky here. He'll loan 75% LTV or 80% LTC, whichever is less. So, at a minimum, I'm going to need to come up with 20% of roughly $2.6M.

This is where I start to panic. I have no idea how or where to find that kind of money. I don't have any friends or family who have that kind of jack to put into a deal, regardless of the projected return (currently 278%, which includes return of 100% of original investment plus cumulative cash distributions over a 5-year timeframe; like I said, this appears to be a great deal).

I've got a pretty deal package put together, with lots of information and spreadsheets (I really like spreadsheets), so if a random stranger said, "Hey, you got anything I can invest in?" out of the blue, I'd be prepared (fingers crossed, LOL). But I'm not sure what else to do with it. I assume it's bad form (and probably against the rules) to just blast it to all the BP members who call themselves lenders.

I'm investigating crowdfunding options as well, like RealtyShares.com and PatchOfLand.com, and while I wouldn't have any reservations about using them, frankly I doubt those are going to work out either. Won't they want a 1st-position lien? That'll conflict with bank loan. Won't they also want me to produce some kind of down payment? That's still going to be $100k too rich for my blood.

I hate to let a great deal pass me by because I can't figure out how to take advantage of it. I know somebody who's reading this will either have been in this position and overcome it, or will have an idea of how I can overcome it. I'm hopeful that I can find the solution before it's too late.

@Ryan Taylor, you know it. I'm like the busiest unemployed guy in Houston I think. Turns out the seller also writes grants to build low-income housing for families in the area and has a waiting list of customers nearly 100 deals long. We're getting together next week to look at the property discussed above and to go over the low-income construction thing, too. She offered to give me her waiting list.

Networking, networking, networking.

Understood, @Wes Brand. Thanks for the continued input.