All Forum Posts by: David Clinton III

Well done. Was the $170k more or less than anticipated?

Hi @Jenelle Abrams, my first recommendation is for you and your husband to get on the same page. Brrr, str, and turnkey from afar are a fair bit more active than lending and LP’s where you bring the funds and the operator does the work. 
I think finding where you both want to be on the active-passive spectrum is key. I’d be happy to get on the phone if you want to chat more. Let me know. 

@John Dunbar, If the contract with the prior owner has a prepayment penalty, that will be triggered.

If not, you are free to sell the property and pay off the original owner.

@Edward James smith, I recommend finding a local mentor, and going to all the local REI meetups. Networking, relationships, and education is where it's at!

You can service them yourself. If you're looking for a provider, Allegro Escrow does a lot of these, or ask your local title companies who can handle "long-term escrow". Be sure to check if they also handle taxes/insurance, if that's important to you.

I believe this sort of question must be subjective. This should be tailored to you and your goals.
So what are your goals? While there are nearly a dozen metrics people use, you have to decide which will determine success for your goals, and go from there. Cap Rate? Cash on Cash return? Net $/door/month? Return on Equity? Time-to-Payback? IRR?

Hi @Catherine Cleveland,

In general, you want to buy based on existing performance, and increase the value by making them perform better (reach or surpass the pro forma). A bank will look at existing performance when making their lending decision. This is because there is no proof you can make it perform according to the pro forma.

You can choose to analyze a deal based on cap rate for small individual buildings, or as a package. Either way, if you need a loan, the lender is likely going to do residential appraisals and value these buildings (<=4 units) based on comps more than on cap rate and rental performance. In your market this may help or hurt. Best to value both ways and see what effect this will have on your loan, and your return goals.

Hi @Robert Miller, I have found that of the dozens of strategies that are out there, different ones tend to hit different communities in different ways. Handwritten yellow letters and bandit signs have gotten me deals over the years. I have tried many other things, but those tried and true methods will make the phone ring. If it's being tried, (but not working), I have heard it said that you should double the efforts until it does. This market phase has made deal-finding much harder than 5+ years ago, but deals are still out there.

I find it helpful to determine who you are targeting (maybe a certain type of distressed seller), and consider where their eyes are. The local classifieds, and other small local publications might be a fit. Try it all and track everything to see what's working and what isn't!

Best of luck!

If you pay it off in full, and your credit/income are fair, you can get a HELOC on that property... I like this strategy because it's so flexible, and you only pay interest on the money you actually use.

@Zachary Schwab, happy to meet up if you'd like. Call my office and we'll set it up!