All Forum Posts by: Josh Kercher

Indeed. Debt is gone and just need to work on the new accounts now and have some patience. I suppose I should look for some low capital investments in the meantime that make sense still... No sense in sitting around.

Finally got the listing agent to get me an updated proforma/rent roll... I'll post some details on this in a bit here.

How do commercial lenders make decisions on their loans? Would a complex like this be based off of me and "my credit profile" at all? If it appeared to be worth it I could put 20% down on this property....

Hello BP!

Wanted to throw together a quick conversation on how to borrow $ to invest in Multi-Family properties when you have a decent amount of capital but your credit is on the other side of the ship (under 640)?

I'm a Realtor and I find myself coming across several deals that fit my own personal criteria for investing as well as our BP "rules of thumb". I've been looking at a lot of 4+ units and a few duplex and triplex.

So in my situation I'm trying to find out what the best way to borrow is when you have good capital (around $100k in reserves) but a low credit score (630)? I'd prefer to leverage myself instead of sinking all my reserves into one or two properties and I would especially like to get more doors in my portfolio and get into a complex of 4+

My fiance has a 740+ but no documented income since she is a nanny (bless her heart)...

I'm frustrated. :cry:

Another good strategy for increasing and getting your payment on-time would be to let him know that the market is demanding $700mo for that unit right now but you recognize that he has been a fantastic tenant...which is why you wanted to offer him a special deal for a rent reduction for "on-time or early" payment. So change his month-to-month lease to market rates and let him know that if it is paid by the 1st (or whatever the due date is) that he will have a rent reduction/discount of $50/mo. It's nicer than tacking late fees on to someone who already is disregarding the 1st anyways... Maybe an incentive is more his style??

So we have due diligence to do. I'll obtain a copy of the pro forma from the sellers and start investigating... and posting.

As for my question concerning methods of structuring a purchase on a property like this...any great ideas?

The current expenses are just off the MLS and has electric included into it (although it is the responsibility of the tenant. Also, the current vacancy is what I need to find out because the income is listed based on currently rented units. If we are 3/4 rented because of poor management then that can obviously change quite a bit... If you remove the $8k or so they show for electric and run 8% vacancy on the "potential" of 43 units at current rates than we would be much closer to our 50 rule.

Hi there!

I'm a Realtor in my area and had this 43 unit apartment complex pop-up as a new listing today. It is listed with the language "WELL BUILT BRICK 43-UNIT APARTMENT COMPLEX WEST OF DOWNTOWN YPSILANTI. 31 1BR UNITS & 12 2BR UNITS. THE GOOD - SPACIOUS UNITS AND NEWER ROOFS, WINDOWS AND BOILERS. THE BAD - PROPERTY NEEDS TLC, MISC REPAIRS, AND LEASING OF VACANT UNITS. PRICE REFLECTS $50K CREDIT FOR VACANCIES AND $100K FOR NEEDED REPAIRS. GREAT OPPORTUNITY. PACKET WITH PROFORMA AT LISTING OFFICE. "

I have not visited this property yet. I've never been involved in a large commercial unit like this and so I wouldn't be familiar with managing such a large complex and not familiar with what the best way to put the financing together (cash purchase w/other investors, finance, etc). I've been using Jon from 123flip.com's Analysis sheet on properties and the property seems to cash-flow quite well no matter how you structure it. I'm happy to post some numbers or whatever anyone would need to see to help me get my mind around it.

Currently they show:
Annual Rent: $272,400 for 43 units and ($245,160 currently)
Annual Expenses: $164,419 (includes taxes/insurance/management/maintenance/water/utilities)
NOI: $80,741

If you purchase for list price of $650k (7% 30 amortization and 25% down) and (hate to assume but) if they are correct in needing $100k of updating/fixes and you run at 8% vacancy rate than you end up with around $60k year in the positive... I also increased the taxes on that estimate considerably to take into account the change in ownership/taxable value.

Just looking for some thoughts here. I could come up with a pretty good sum of money to put into the down payment of this complex but it seems as though structuring the deal to bring in some cash heavy partners would offer them a GREAT rate of return and much higher leverage for myself (the CREATOR of deals!!!!)

Thoughts? :idea:

Fantastic idea! I WILL make a call asap... Thanks Bill.

I have a property that I'm looking at (a 3bdrm/1bath) in great area listed for only $19,900 as a foreclosure. The problem is the bank foreclosed only on the lot that the home was built on (they owned three lots) and the well was built on one of the lots that were NOT foreclosed on!!!

I believe the other lots have a tax lien on them and I know NOTHING about how to go about getting all of them together. I'm not sure what I can afford to offer without knowing how much I could spend trying to get the other lots together so can anyone give me some advice as to how I can research this? I'm trying to pay cash for this property but need to know how to proceed or runaway...

Josh :roll:

David I've looked into the obvious alternatives of friends and family as well as credit cards and I haven't gotten lucky with that yet (although I haven't given up on it). Company doesn't have 401k unfortunately so that is out...

I DO think that it is a good option to go chat with some local banks about the deal and I think I would probably fare better if I had all the numbers on paper and a full proposal in order. I start working on that now.

As far as a hard money loan; I am not against it so I'm open to conversation with any BP members who will loan in Michigan.