All Forum Posts by: William Beck

I'm in, looking forward to it!

Hey Darren,

Just out of curiosity did you continue to follow this property you speak of? Would be interested to know if it was eventually picked up and rehabbed how you envisioned it. As you know, I picked up my first duplex a couple months ago in South Orange and am always interested to hear how other investments in the area panned out.

-Bill

I'm in! Thanks for taking the time to make this happen. Look forward to seeing BP nation for another fun filled night.

Lots of good advice here, thanks all!

Shane, my partner and I definitely thought about your strategy but how would we go about that if its zoned as a 5 unit? Not sure we would be able to start blowing up walls until we own it haha.

Mike, appreciate the information, the one pager is a solid idea and I definitely want to incorprate this into my larget b-plan template. I am still waiitng on financials from the owner, apparently his accountant combines his yearly property income into one report, which definitely isnt helping me.

I have confirmed the seller is willing to offer a 2 year seller finance term, however, to be honest I'm not sure how i could use it to my benefit. I am still in the process of solidifying down payment funds for this property, so maybe I can negotiate the seller financing to help in that regard? Say i need 20K to close the deal and I offer a % of monthly cashflow (maybe I offer him % of cashflow for 3-5 years to sweeten the deal?) as well as a percent return on the principal once the 2 year term is up. Thoughts? Maybe someone can expand on what my pitch should be?

Appreicate the tips, FYI, we are working with Monument Bank. Not sure if anyone is familiar with this bank. The guy I am speaking with there is a family friend and seems to be willing to work with my situation, understanding my lack of history and experience in the game. At the very least i feel i can learn a great deal from this whole experience, anxious to see how this all moves forward.

-Bill

Thanks Jon

Still waiting on the financials, so once i receive i will be sure to cross compare against the current situation and potential income.

More to come...

Thanks for your quick responses.

I was just having this debate with a friend today. Granted neither of us are very experienced investors, we still found ourselves negotiating terms to fictional deals.

I am currenly in a situation where I am looking for some private money, mind you for this deal most investors will be friends/ family. So say i have a 4 unit property I am looking into and need 100K to make a down payment on this property. I come up with 25% of the down payment on my own and finance the rest to one private investor. At the point of negotiation with this investor how would you approach it?

Options as I see it:
1. Offer stake in equity equal to the amount of down payment (so in this scenario 75% equity, which sounds crazy to me). Also, I would offer a fair share of monthly cashflow, not sure what this number would look like maybe 30%-50%?
2. Strictly offer monthly cash returns of 30%-50% and also offer a short term option of say 3-6 years where I will proceed to buyout his/ her portion of the property (in this scenrio 75K)and also potentially offer a % appreciation of the 75K (in this deal the investor walks away with monthly cashflow returns as well as a variable appreciation return on his principal amount)

Just some thoughts I have in my head. I am sure you could write out a million different offers but I am curious as to what a stadard offer looks like. Appreciate if someone could respond using a fictional example or just running off my numbers here. Helps me understand it all :)

Thanks Bill

Hi All

Thanks for responding. Recently inquired for all financials including rent roll and tax returns, as mentioned above. Hoping to receive this information by 9/26 so i can confirm the numbers i have been playing around with.

On a separate note, what is the best method for evaluating vacancy rates in an area? I have heard that exploring the area in person is one of the most effective strategies, physically observing the area and looking out for rental signs and what not. Are there any other methods of evaluating vacancy rates?

This 5 unit has recently rented out the last vacant unit, meaning it is 100% occupied. However, not sure if this should be a settling feeling until I can confirm rents/ lease agreements with the seller.

I was also wondering what house material is seen as the highest overall quality (i.e. brick, masonery, stucco, vinyl siding..)? More of a curiosity question but i am sure this should play into an evaluation.

Thanks again for any advice.

Thanks Colleen,

Interested to hear about your recent investment, how is it performing?

I was looking into a 223(F) loan, if I understand this loan correctly I could use it to finance this 5 unit with 15% down. If anyone would like to elaborate on the pros and cons of this type of loan that would be great. I dont necessarily need to go this route, I can more than likely come up with close to 80K to fund this property but it's nice to know all your options.

Very interested to learn more on the subject even if this property doesnt end up working out for me.

Hi All

I am currently looking into a 5 unit residential property (no commerical space here) in Philadelphia. I am very new to the game so any tips here would be great. Just looked at the property this weekend with my partner in crime and we both agreed this property is worth diving into.

However, as you may suspect with my youth (23 years old) I do not have a great grasp on the commerical loan realm. Needless to say, I don't have much expercience in real estate, besides watching my dad build a mini empire of houses. To give you a rough vision of this property, it is sitting in a C+ to B- area (subject to one's opinion obviously) but is by no means a scary neighborhood. The property has been completely renovated as of August 2013, new water heaters, new windows, new kitchens, refurbished common stairwell with nice wood finish and a nice stone front look from the exterior. Currently, there is one vacant 2 bedroom unit, one occupied 2 bedroom unit, two occupied 1 bedrooms, and 1 occupied stuido (top floor but nice space, i would estimate 600-700 sq ft). Fully rented out this property has a potential income of $3,400/ month.

Enough of the details i dont want you guys stealing my property haha, my real question is what do you think my best option for financing would be? Will a commerical loan be too difficult to attain, given my lack of a track record/ excperience and the fact i will only be able to put down 30%? My plan is to explore seller financing possibilites while i hunt down a commerical loan that will satisfy my needs. You may be thinking at this point, why doesnt this kid ask his pops? I have and I have him interested but he really wants to see me get this done on my lonesome, not cool right? But i respect that. Also, if you are wondering, my "partner" is my a good friend who is my age and has been persuaded by me to pursue this endeavor, he's got some cash.

At listing price we are looking at potentially 82K down (at 30%), which is definitely a bit of strech for our personal funds but we have been looking at properties for a while now and this is definitely the one to make a move on.

Let me know what you guys think. Appreciate any insight or advice on the matter. I only ask that you dont reply saying this is out of your league because I know i can make this work. I have a lot of resources at my disposal that i didnt discuss here (mainly family).

Thanks for reading.

-Bill