All Forum Posts by: Brandon Hicks

@Cara Lonsdale

A seller that is savvy and is looking for a tax-advantaged exit without having to 1031 and continue to deal with some sort of real estate. These deals are done all the time but rarely with agents involved because it’s nearly impossible to negotiate a deal like this with one or most often, two agents relaying back and forth. I didn’t overpay....it’s not a distressed property with lots of deferrred maintenance and it cash flows like crazy. I cleared $26k last year, which was my first full year of ownership and I should clear $30k this year due to raising some rents and cutting my insurance cost by $4k 

The deals are out and they’re being done every day in this country. There just isn’t a realtor sitting at the table. 

Michael O. The debt service on $4.17m with the terms you entered is $316k a year. So that leaves a mere $4k left over. This deal would need to have a huge value-add component to make sense. Disclaimer....I had just woke up when I responded earlier and read the $320k NOI as GROSS income in my mind so my earlier post was a horribly inaccurate response.

Cara Lonsdale I purchased a nice 16 unit apartment complex for less than $2000 out of pocket (upfront insurance and $1000 earnest money) and received over $14k at closing and then collected another $8k in rents the first week I owned it. It was seller financing with no realtors involved. I’ve done many smaller deals with very little money out of pocket as well. To get these deals you just have to focus on off-market properties where you can develop relationships with the seller and really build a win-win structure for both parties.

And I’m pretty sure that deal doesn’t cash flow at after you put $3.5m or more in debt on it.

Ballpark numbers...expenses will eat up 50% of the income. So then you’d subtract your debt service from your remaining $160k.

I have around 50 tenants that deposit into one of two biz accounts (different banks) and I pay a bunch of private notes by paying into mostly personal accounts at several different banks. I think Wells Fargo was the only bank where I have ever been asked for ID and it was only once or twice in the 3 years I’ve paid on that note. I can see where it would be an issue at the bigger banks and less at smaller banks. I’m not sure why anyone would use Chase though. Smaller banks are so much easier to work with on the lending side once your portfolio gets past a certain size.

I would sell EVERYTHING I own at 20x gross annual rents. No hesitation whatsoever. Never heard of that rule though.

Google is actually more effective for searching the forums in my experience @Patrick Liska

Why are you guys denying applicants? Aren’t you doing a good enough job maintaining your properties and marketing to get multiple applicants? Don’t deny anyone...just rent to someone else. “I have leased the unit to another applicant” is the official statement.

As the others have either stated or subtly stated, this isn’t a deal worth doing. If you want to be a good steward of the capital and make some money for your lender and yourself, you’ll need to find a better deal. Familiarize yourself with the BRRRR strategy. If you can find a deal that can be bought and rehabbed that will be worth around a third more than what you have in it you’ll be able to refi and get a new 75% LTV loan on it and pull your private lenders cash out. Then you can keep doing deals with the same recycled capital.