All Forum Posts by: Charles Soper

So it’s owned by the county/municipality it sits in?  What do the tax records say for ownership?  If it is I’d knock on the door of the local building dept. and find somebody who can make a decision about the disposition of the property.  You just might have found a deal that they want to get off their books for pennies on the dollar, careful though, make sure you can afford the rehab!

Just a thought, as long as it still cash flows why wouldn’t you just bring in a property management company?  Once you move it’s true mailbox money!

Gotta do your due diligence, only you are responsible for your analysis.  When that’s done then maybe ask the BP community for input, lots of experience and knowledge here but you need to do the work.  I’d suggest you start with the BP calculators and a webinar on how to use them most effectively.

Seller financing?  You can define terms that are good for you and them which gives you a chance to renovate and refi so you can pay them off and have equity too!

Maybe you could break up the units and purchase the 3 unit under and FHA at 3.5% down, catch is you'd have to live in it a year. The 5 unit is commercial so you would need to come up with a down payment but would the seller do a 25-30% carry back to cover that, better than asking for him to carry the whole thing. The next option would be family and friends who have some cash to spare for a while until you can get rents up and get it re-fi'd to pull cash out.

@Charles LeMaire that was very well articulated!  The advantages of using SDIRA and Solo 401k monies for investments may seem like a huge advantage but a lot of people who use them (myself included) probably don't think through the tax ramifications beyond the immediate investment under consideration.

Looks like you are missing CapEx and property management costs, also have you accounted for the increased taxes at sale? I'd suggest you try using the BP calculators, they help remind of you fall the line items you didn't know about or inadvertently forgot, ask me how I know :)

So exclusive of closing costs, you are all in at $15,000 and realizing a monthly cash flow of $850, this means you're cash on cash ROI is 68% annually, which is stellar and seems too good to be true so make sure you go back and account for the missing items. Have you set aside a renovation amount or is this turn-key? What class property? If you're buying into a D class property the numbers always look good but you should consider it payment for all the headaches you will inherit.

@Simon C., most crowdfunding falls under a different rule as a large majority of them don't require you to be an accredited investor.  You can read the "federalease" here: https://www.sec.gov/news/pressrelease/2015-249.htm...

As I understand it, by it's very definition a partnership that consists of limited partners (LP's) who bring the capital, and the general partners (GP's) who do the active management you as an LP are insulated from any legal action as you haven't been actively involved in any decisions that would result in a lawsuit.  Even if by some chance the LP's were exposed I would expect that any action is limited to the legal partnership as laid out in the operating agreement and shouldn't ever get as far back as you're Solo 401k or you personally.

As @Chase McArthur mentioned consult an attorney, maybe even a syndication attorney who can answer that question more specifically

Welcome to multifamily, once you get this bug you likely won't want to go back to SFH. There is some potential there but a few questions. His expenses look good, well below 50% but you can expect your insurance and taxes to go up and I don't see a set aside for CapEx and R&M. What's the purchase price? Even at a 50% expense ratio that leaves you $14k in income BEFORE debt service, or about $1167/month. Hope you're getting this place a song because that makes your numbers pretty thin cash flow wise.

It looks like this place has been around a while, is the current use best and highest?  Does it make more sense to redevelop it as retail/warehouse since it's already zoned for it?  Space to build more units or tear down and rebuild into mixed-use?