All Forum Posts by: Lucas Vaughn

Michael Kelly So how did this venture turn out? Did you build an RV park? What level of service are you providing? What did your startup costs look like? And what are your monthly ongoing costs? I am interested in doing this in a small Texas town where I own an undeveloped city block next to public housing. Thank you!

I am a partner in a large (470+ units) multi-family deal in Houston. We are currently looking for a lender that would be able to write a loan without taking a lien on the property. (Gasp!) Here's the story:

We bought the property in 2008 with a 10 year Fannie Mae loan and a 2 year bridge loan. The plan was to repair the property, get it performing, then refinance and pull our cash out, as had been done many times before. We completed the rehab, put a management team and systems in place, and got the property performing. However, the market dropped out and the refinance option was no longer available.

We were able to renew the short term loan a few times until the middle of last year. That's when the lender called that note. We had thirty days to pay or else face foreclosure. Fortunately, someone loaned us the money to pay off the bridge loan (hard money, so to speak). However, the loan terms are less than favorable, to say the least. We are now looking for a loan with better terms.

Fannie Mae is the first lien holder on the property. The terms of that loan do not allow for any other liens to be made against the property, which is why I titled the post "No Lien Available." Further, the Fannie Mae loan has an extremely large prepayment penalty in place for another two years, so it doesn't make sense to pay off the loan and makes it difficult to sell the property, as a buyer would have to assume the current Fannie Mae loan, which is at a higher rate than current market.

My questions are:

1) Does anyone have a recommendation for a lender that may work with this type of situation so we can payoff the hard money loan? We are looking for a loan amount of $3.5 million for a 2 year term. The exit strategy would be to either sell or refinance at the end of the two years.

2) Does anyone have any experience with Fannie Mae prepayment penalties? If so, is there any way to pay off the note without incurring the penalty?

3) Does anyone have any suggestions on an exit strategy? We will sell if the right buyer comes along, but that hasn't happened yet.

Thank you!

I have the same issue at one of my properties, but not nearly as big of a slab. My slab was actually covered by asphalt. I have now removed the asphalt and found the original slab to be cracked and in need of repair. I plan to have my GC patch it with concrete and then cover it with epoxy paint. But I am not sold on my plan, so I am interested to see what other ideas are out there!

@Terry R. I recommend Chris Lee at J&L Air Conditioning, 817-341-3332. They replaced an HVAC system for me at a property I recently flipped in Fort Worth, and they will be doing some A/C work for me on another property in Dallas. They did great work on their installation and I will definitely use them again. PM me if you would like more details. Good luck!

@Michaela G. I know this is off topic (sorry), but how do you get your houses rented if you do not put a sign in the front yard? Just curious. Thanks!

I am currently finishing up my first rehab project in the Dallas area. For you locals, the property is actually in Ft. Worth, near 820 and 30. The ARV for the property is about $240K. It is 4 bed, 2.5 bath, 3,400 sq. ft. The property backs up to a local golf course.

My question is, should I put blinds on the windows or leave them open? I have it in my rehab budget, but I'm not sure if the blinds will make a difference on the sales price. What does everyone else do? Do you include blinds on your windows when you rehab and sell a property? Do blinds make any difference in sales price or days on market? Thanks for the help!

@Corey Davis I am also working to figure out the best way to structure my RE business to handle investors. For my current deal I did a JV agreement with another investor. It is a simple agreement (3 pages) and it outlines the duties and expectations for each party in the deal, as well as the profit split. The other investor provided almost all of the funding and I am handling the operations. We will be splitting the profit 50/50. The JV agreement was specific to the current property, but is worded in a way to where we can continue doing future deals under the agreement.

I will be creating an LLC to operate under on future deals. I will not have any partners in the LLC. As @Douglas Dowell mentioned, I prefer to "date" my investors and not "marry" them! That being said, I am wondering how best to handle a deal with investors. I am fine with my current arrangement of duties and profit split, so I am working to figure out how to paper that up. Should I do another JV with the investor and LLC as partners? Also, I wonder what kind of tax savings I can pass on to my investors? I will be consulting with a CPA and RE attorney in the future, but these are some things I am thinking about.

@Jason Measures Great job! How did you find the property and make contact with the seller initially?

@Brent Watson The last meetup was on Feb. 20th. The meetup for March has not been announced yet, but you can join the Facebook page and watch for the meetup date at https://www.facebook.com/#!/groups/DFWBiggerPockets/. It will most likely be at the end of the month.

Lucas

Welcome to the site Brent! You are starting in the right place - Beginners Guide and podcasts. That's exactly what I did. Listening to the stories of other investors was very inspiring and ultimately helped me get motivated to take action. Taking action is the second step after learning. Keep at it, and maybe I'll see you at the next BP meetup!