All Forum Posts by: Chris Lohmeier

I have the same issue. Can't publish a listing because the other units in the property already have tenants in them and the system can't deal with that. 

I have been using this time to consolidate and update. I actually use the metric you mention. If I can make 10 years worth of cashflow on the sale then it's worth selling to me. I can 1031 that into something bigger and better, or bite the bullet, pay the taxes, and pay down a LOC so I have more options when something comes across my plate.

Right now the market I am only has 20% of the usual number of properties for sale so anything close to a deal that comes on it scooped up within 24 hours. It's an unbelievable time to sell. 

The hard part is finding a deal for the 1031, but, at least in my market, most of the cash on the sidelines is just watching the MLS just as they always have, so when I put more work in, I am able to make deals that work.

Yes, home improvement was what I listed. 

It was in my personal name, but you are correct in that either way would not matter at all. They don't really care what you use the funds for.

I've used SoFi for rehabs. The process is pretty quick, but there is the usual back and forth with them requesting additional documents. The last one I closed on was for $75k, it took about 7 days from initial application to have money in my account. I paid it back 30 days later with no prepayment fees. 

@Troy Javorsky 
I have my portfolio with Union Bank and Trust, who I know has some more western branches. Mine is a commercial loan based off of their Ag program. 
I believe their standards are 5 year fixed with 20 year Am, but I was able to get a 7 year fix on mine.  The rate last year was 5.5% but since rates dropped they just gave me a no cost "refi" and dropped the rates to 4.5% on everything. 

@Josh Nix it was in David City.
@Troy Anderson it was under contract on day three but doesn't surprise me that it was still listed long after that. That real estate agent did as little as humanly possible through the whole transaction.

@Young Park

I remember seeing that on their website also the first time I applied, though I can't find it now.  I've used SoFi twice in the past.  They have never asked what I was using it for other than the initial drop down box on the application, which states "Home Renovation," but never specifies whose home.

Investment Info:

Large multi-family (5+ units) buy & hold investment in David City.

Purchase price: $462,000
Cash invested: $7,400

This 12 unit apartment more than doubled my number of units. It was a quick three day, offer, bidding war, acceptance process. I initially took out a large personal loan for the down payment, and have since paid that back with cash from an investor and a LOC from the other properties. My cash invested will increase shortly as I'll be renovating an unused gathering room into a studio apartment.

What made you interested in investing in this type of deal?

I've always wanted to make the move to apartments because of the efficiencies of having everything under one roof.

How did you find this deal and how did you negotiate it?

It came up on the MLS. I made a full price offer, the sellers agent said they had two offers at around the same level. I increased my offer by a few percent and they accepted.

How did you finance this deal?

Portfolio loan for 80% of the deal. The other 20% is coming from an investor, a LOC on the existing properties in the portfolio, as well as a small amount of cash out of pocket.

How did you add value to the deal?

I haven't yet, but I will be turning an unused common area into a studio apartment.

What was the outcome?

Still TBD but looking very good right now.

Andrew, I invest in one of the small towns not too far from yourself (~1,200 people). I bought a property that was being mismanaged and had the rents set at a level for really quick turnarounds just below the town’s market rate. I went in and raised the rents to a higher than market level, everyone was on a month to month lease, and started fixing the issues. Tenants fled in droves, the good and the bad. I finished my repairs and started marketing in ways the old landlords didn’t, they only used a flyer in the coffee shop. It took me a total of two and a half months to get back to profitability. I have had to adjust rents back down slightly (1/5th of the raise) to get shorter turn arounds but they are still above the standard for the town and I have a much better class of tenants than before. I get away with it because frankly most of the other landlords in the town are terrible at upkeep/repairs/screening and I offer a much better home environment. Don’t be afraid to try to improve the old system.

With that said, I have also seen the other side of this. A certain small town with 2-1 houses selling for ~$25k with $5k-$10k in needed repairs that are currently renting for ~$350. On the surface this would seem to simply be a case like above of undervalued rent. Looking deeper though you’ll find that the city owned utility service cost averages out to $350 a month. I would never take on one of these, there just aren’t the jobs in small towns that will allow you to increase the rent by much in this case. Dig deep enough to find out why the rent is where it is. If it’s just poor landlording, then go ahead and take a shot at setting the bar higher, but if there are real underlying problems with the numbers, look elsewhere.