All Forum Posts by: Alex Corrion

Investment Info:

Large multi-family (5+ units) buy & hold investment in Lansing.

Soon to be 7 unit apartment building blocks from the Michigan Ave corridor.

What made you interested in investing in this type of deal?

Cashflow

How did you find this deal and how did you negotiate it?

Off Market, made a lowball offer that was accepted

How did you finance this deal?

Seller financing 20% down at 6% with a five year balloon.

How did you add value to the deal?

2 Units were never renovated and need to be gutted to the studs. The house was renting as a 5 unit building and the numbers still made sense as a 5 unit building. We are now in the process of getting these units up and running to maximize the value of the property.

What was the outcome?

This is in process.

haha, I am looking at the same property, not interested as I just closed on a place today.

I did however talk with that guy today. I didn't get the best vibe, but the numbers make a ton of sense. Is there anyway that you can get a 'partner' on the deal to help you with the down payment. I would not buy that residence if there is no inspection contingency, just because someone is living there doesn't mean that the place is rent ready and may need additional rehab to get that 180-190k. Just to reiterate get a good inspector. For example, a partner might be your parents to help you out with that downpayment and on a place like this I could see a 5% downpayment loan still cash-flowing well. Do you know the unit make-up from what I remember the rents are total 2800, but 3 of them are 600 which seems like they may be one beds and therefore a bit cheaper to renovate. 

The local RE-meetup is next week on the 19th at Tony M's on the westside of lansing, you should come tons of good info. For lending, I would suggest calling Dart Bank, they are good and can get you a good rent. Signed leases can qualify as income to get you approved for the loan if your income is low... 

Hi Everyone, 

I recently got an executed purchase agreement on a 5 unit building (renovating two basement units that are currently not in use to make it 7) in my area (Lansing, MI). It is a currently 'fully occupied' building in that there are five signed leases. As we are heading closer to closing (the next few days) we found out that one tenant did not pay this month and now owes ~$180 in fees on top of the rent. The place is below market rent and it is affordable housing (C class property) so I would assume that this person is never going to pay. I did an inspection last week, and my inspector told me that he couldn't believe that someone was living in this unit because there were very few personal belonging. I am thinking that the person left town. In the event that I cannot contact the person what should my next steps be. I am assuming that a notice to pay or vacate was already sent to the property because the current owner owns ~550 units.... so seems like he would have this under control. 

I guess my questions are 1) what is the fastest way to take possession of the unit so that it can be marketed again?

2) If I cannot contact the person do I need to go through a court ruling?

3) Do I need to independently send a pay or vacate notice if the current owner already did this or can I take the next steps in the process?

Hey Zach, I live and invest in the area. I would love to talk more about it with you. 

Don't pay attention to Zillow over there, it has a bad algorithm in the Lansing area. PM me I would love to discuss the specifics on the place. 

Hey Terrence, Im always interested in meeting new people. What part of real estate are you interested in? 

@Aaron Hunt what do you spend a year in maintenance on those old dogs....?

I lease because trucks are stupid expensive, but when you lease them you can get a nice payment for a brand new rig that doesn't break down at all. And I will argue that you actually are getting as good of a deal as if you were to buy it new!!! Let me show you what I am talking about (also I think this ONLY works for full size trucks)... 

1st I plan on buying the truck outright so I don't care too much about miles.... 

I leased the truck for 3 years w 10k miles per year and I pay $253 (0 down) per month for the lease. If you add that up then you get $9108 for the term of the lease. Then when I was getting the lease I was very particular to know what the buyout price is (this is preset, it has nothing to do with the condition of the car when you turn it in). In my case the buy out is $28k. So if you add that up you get a total price of $37,108. The sticker on my truck was $47k, its a nice truck but not top of the line (nothing crazy fancy) but it lets me have no limitations of the materials I can pick up myself so when I see deals on housing materials I can go grab them right away. (i.e. perfectly good cabinets that someone is selling on facebook)

Also much better fuel economy than a truck that I could have bought with cash (~$10k) 

For BMW or something like a 4 door sedan this most likely doesn't work..... 

How are you finding this house? Was it listed on the MLS, if so then there is a good chance that it is not a good deal and that is why you are worried about the margins. My advice would be to send some mailers or if you don't have time to do that, then find a wholesaler who can feed you deals as they come across them. It does take time and many deals might not be the deal for you but eventually you will find one that works and jump it. It will be the best money that you have spent in terms of experience. I totally agree with what @Jay Hinrichs said. Seems like a deal to me, I would do it if you can have a good GC that has time. For me finding a GC that isn't overloaded with work is the problem right now.

You can wholesale in any market. You just have to find the right deal. Right now wholesaling is hard because people are overvaluing their houses. However, if you never start then you will never know if it is possible. Get out there and start sending mailers and knocking on doors and you should be fine. I am looking to buy right now in the Greater Lansing area so if you find a deal let me know. That being said I have met a few wholesalers around and the deals that they sent over were not deals. I would think strategically about getting a house under contract, just make sure that it is a deal and that you can offload it fast and with easy. 

Also, what do realtors know about wholesaling? They want you to think that the only way to buy the house is by using a real estate agent.

Thanks everyone, I got outbid. On to the next one!