All Forum Posts by: Chris Piette

@Jim Kittridge I just sent you a PM

Posting a general comment for anyone following this post with a bit of information I have learned:

By utilizing an SBA backed loan product you prevent yourself from setting amortization terms for seller financing for anything less than what the SBA offers. The SBA won't allow anyone else on a note to get paid back before them (with the exception of the lending institution I'm assuming). So in my case where the seller was going to carry back 10-20k, it's really unlikely they'll want to wait the 20-25 year schedule I'm hoping to attain. 

Sad face again..

@Mike Meisner true an LP would be easy enough to set up, I sourced it from a family relationship off market essentially

@Jackson Babcock thanks for the heads up!

@Greg W.

Thanks for the awesome information, I reached out to them and they seem great!

Hello everyone, as the title states I am working a deal for a 200 unit self-storage facility here in Wisconsin.

It is by all means already a profitable facility which includes and newly paved entrance/security system/roofs, as well as room for massive upside due to the fact that the rents haven’t been increased in at least the last decade (well below local market rents) as well as the fact that the facility currently has no website or marketing strategy other than word of mouth.

-Currently an 8.5 Cap

-My projected rent increases will take it to a 13 Cap (emphasis on projections of course)

I am currently in the process of gathering insurance quotes and talking to lender and

1. The first quote i got back was twice as much as the current owners current premiums

2. The first lender I spoke with told me that because it is a “single use facility” I would more than likely need 15% Downey opposed to 10% (utilizing SBA 504), but I was under the impression that self storage was classified as “multi use”

If that were the case, I will not be able to come up with the additional 5% down and the seller doesn’t want to carry THAT much..

What are my options in creatively coming up with the difference? I don’t currently have any investors doing the deal with me, and am not really sure how/where to go about seeking investors for commercial deals like this.

Aside from that, any and ALL tips/tricks and advice is welcome, this is my first time venturing into commercial and I’m in complete new territory here..

Thanks!

@Matthew Paul

You may be the exception and not the rule.. however I respect the hustle and that’s awesome to hear man, I hope to be there some day.

Out of curiosity

At any point did you use leverage to acquire properties?

And are you at the point now where your cash flow is compounding enough to be able to purchase new investments, or is it all strictly from your w2 contracting?

I just can’t get behind DR’s approach to dropping all cash on deals. Not scalable for anyone other than silicone valley earners poaching homes up and down the Midwest. Just not realistic for 90% of us we’d be dead before we were able to scale to our goals.

However, this entire ordeal has re enforced my appreciation for the discipline to keep a solid 3 months PITI reserve (at a minimum) for each property. I do sleep much better at night knowing that even if legislation weren't to catch up, I'm self sufficient for at least 3 months.

@Caleb Heimsoth can you please elaborate on why paying down your primary is a bad idea?

@Chris Mason Thank you for the facts about the VA loan and the insights my friend, I do plan on doing a version of your example, unfortunately I don't believe the spread will be as lucrative in small town WI lol. Based on your experience as a lender, what is my likelihood of having a "letter of intent to employ" accepted by an institution?