All Forum Posts by: Trent Currie

My first deal was at a Sheriff's Sale. The first position bid the highest. Post auction I approached him and made a cash offer appropriate for the property. They liked the offer and the deal was done within the week.

Sounds like you could find more profitable and less questionable partners. What exactly are you contracted to do?

I use the 50% rule a majority of the time. However I recently ran into an example where the 50% rule was not aggressive enough. It was with a single family home in Cleveland. While using the 50% rule I showed decent cash flow. WIth the actual numbers the property taxes were just over 25% of the annual cash flow which put the deal in the red.

Use the rules to qualify a property and then do your best due diligence with actual numbers.

If you have a good relationship with your commercial banker, they may be able to give you averages for $/sf. Montana on average is 75$ per sf.

Joel Owens-

Totally agree, a few banks we have worked with offer a form of pre-sold scenario. If you have a buyer during construction who signs a contract and puts down x amount of money, the bank considers it a pre-sold. They then allow you to leverage again for another spec. You may want to discuss this with your bank.

One thing I would ask your realtor is if they are able to bring you developers or lots which can be subordinated. This will allow you to use the equity in the land to finance part of your construction. Also another scenario you should discuss with your bank.

I would start with assessing what level of risk the new partner is willing to accept. This will give you a good idea as to what type of structure you can start with.

For your mobiles will you do park or tenant owned?
Depending on the septic system with a tenant owned mobile home is a nightmare waiting to happen. I would be very cautious moving forward.

How will you set up your services? Where is the water etc.?

Additionally I find it very rare that a bank goes out to 30 year ammo on a commercial loan.

With 2k you may want to start at a Sheriff's Sale and see if you can pick up something cheap to wholesale.