All Forum Posts by: Zander Kempf

There are a wide variety of ways of finding distressed sellers. I have tried a bit of DMM, yard signs, social media etc. I used to search the MLS for deals but the competition just bids the prices up far too high nowadays. What methods have you found to be the most effective for finding distressed sellers?

(I am in the Phoenix market but would love to hear about anywhere)

@Brian Whelan You could also look at delayed financing under a conventional loan. They are still being offered and assuming your ARV is high enough you could refi immediately (no seasoning period) up to the purchase price plus closing costs, or 75% LTV, whichever is lower.

@Matt Herbert

That's a great point and certainly a potential concern. However that might open up some opportunity after COVID blows over if there's a shortage of STRs

I would like to hear fellow investors thoughts on the strategy of investing in long term rental properties in rural areas with low vacancy. I am specifically looking at the New Hampshire markets (these are local to me). Vacancy rates across the state are between 1 and 2% on average suggesting low vacancy risk. Let me know your thoughts!

I assume you mean 7% in points? That would be an exceptionally low interest rate for a hard money loan.

One important piece to consider is the chaos in the commercial lending markets right now. I just had my commercial lender back out of a deal and my broker said my more are indefinitely cancelling their long term commercial products. If you get a hard money loan with high interest and then are unable to get a commercial loan to refinance then that could lead to an unpleasant situation. 

You could also look at delayed financing. If you have a friend or family member (personal loan even) that you could borrow the funds from for 15-30 days, you could buy in cash and then execute a delayed financing under a residential loan immediately. This also would let you pull out 75% of the appraised value, NOT the purchase price. No seasoning required.

I am curious to hear how many investors are approaching the current market conditions and moving forward. Does anyone have a strategy to finding good deals in the market right now? Are people patiently sitting by the sidelines and waiting for all of this uncertainty to dissapate?

I had a four unit property five days from closing and our commercial lender just canceled their 30-year fixed product due to market uncertainty. A mortgage broker switched to a second lender and the following day they also canceled their long-term lending products. Is anyone else having this issue?

@Michael Anderson I'd be worried about your lender backing out. I have an apartment building under contract that our lender backed out on this week because they canceled their 30-year fixed program. We got set up with another lender who backed out two days later. Crazy times right now, hopefully everything blows over soon

Here is an interesting one for you:

I have a 4-plex under contract that currently has a cell tower on the roof. Looking at the disclosures, the owners set up leases to telecom companies for the tower and then sold the leasing rates for the next 30 years for a lump sum to a third party. The annual lease rate was 20K and they sold it 10 years ago for 300K. now that I am purchasing the property and the leasing rate has already been sold I feel as though I am missing out on a significant revenue opportunity and assuming a lease that I'm not getting paid for. The numbers for the property are solid with some value add opportunities so the deal is certainly worth doing, it just seems like we're leaving money on the table. Any suggestions?

@Salvatore Lentini

You mentioned using private investors. Do you typically setup joint ventures to enable this? One issue I foresee is running out of capital so the ability to use private investor funds is essential. I'm just trying to figure out the best way to go about it. Thanks for your insights