All Forum Posts by: Amit Chawla

@Nathan Harden I have not been able to find one for any of the deals I come across, but I was recently given a sharable Rolodex with anything/everything a person would need in Ohio.  If you DM me your email I can share it with you.  Im sure some of the lenders would lend outside Ohio.

Personally I would maybe pay for an appraisal to see how much the property is now worth.  If it comes back at a 200k appraised value then you can think about it.  But based of @Chris Davidson's reponse above it doesnt look like a great money maker.  However if it appraises for say 150k, then Id offer the partner 37.5k for their 1/4 ownership.  However I would run the numbers again as to what your actual return is.

If the 5.3% return is good enough for you then do it.  It seems like the easier option instead of devoting more time to find a deal

@Stephanie P. thats what its looking like.  Others who have told me that it can be shorter would be for hard money or some other non-conventional loan.  I already have bridge financing and would like to go for something that has a lower rate over an extended period.  6 months looks like the shortest I can get it done.

@Jeff Koval I have a fantastic property manager in Akron. He works in Cleveland as well but main base is in Akron. He is very familiar with STR and has taken on my Apt. building in Akron. If you want his info, PM me and I'll send it over.

I have used the following formula to see how much I need to invest.  This is a total amount so you would have to modify it to reach your specific goal.

First start out with how much money you want to make off of real estate yearly.  Lets say its 200k/year.  Divide that by your annual cash on cash return (in this example lets say 12%).  In this example that comes to roughly 1.67mil.  So you would have to invest 1.67mil in cash or equity in order to get 200k in yearly rental income. If you take that 1.67 and divide it by how much you have to put down (20%) this comes to about 8.3mil in property value total. 

Is there any way to renovate the properties slightly more so that they ARV for 100k? You can also look to find a portfolio lender.

With rates being where they are, you will 100% lose money on this deal if you are getting financing.  Also keep in mind that the 6.52 cap rate that the seller is advertising is most likely higher than the actuals.  Most tend to use their costs to calculate when really they should calculate it using their selling price.  A 500k building will not have the same insurance and property tax as a 1mil building.  

@Joseph Cornwell im trying to pull out 70-75% ARV not just my costs. With the way the numbers work, I will be able to pull out more than I put in which will setup my next project

I think off the top of my head it was around a 6-7% rate. I also chose to do the repayment over 15 years. I should be paying the entire amount back no later than April of 2023 and maybe as soon as January 2023. The rate is siginifcantly lower than the HML that I took out.

@Jason Redeker I have an account with Aven that I am using currently. Tried to go the traditional HELOC route and after almost 2 months of providing paperwork the lending scenario changed (due to rising rates) and they backed out. Contacted Aven as my deal was about to fall apart and got approved in about 1 day. Used the HELOC from Aven to fund my down payment on a BRRRR project I am working on. So far, it has been very easy to use. Their rates might be slightly higher than others but it was worth it considering I did not have another option.