All Forum Posts by: Jason Aycock

What are some low overhead methods to cashflow a parcel of real estate? Please add to this list:

Building/Home Lease (Standard Landlord/Tenant Relationship)

Billboard Leasing

Cell Tower Leasing

Self-service Car Wash

Mini-storage

Fireworks Tent

The seller is in pre-forclosure, the sheriff's sale has already been postponed once, and home is scheduled to be auctioned off at the end of this month. Seller said she'd take $60k, but the house is in such bad shape that I don't want to pay more than $36k. Home will require $20k in renovations. She owes $48k on her mortgage and doesn't know that I know this. There are no Junior Liens.

After speaking with my friend at Chase Bank, I was told that her account was denoted for a short-sale as one possible option for her. I was advised to reach a purchase price agreement with seller, put it in official PA with short sale contingency, and let her take it to Chase.

What do you all think will happen? I plan on offering all-cash. The home is in VERY bad shape, and I don't want to see them list this home on the market and draw out the process either.

--Any info or ideas to expedite this and/or get it at the price point that I honestly feel it's worth ($36k)???

--What incentive does she have to work with me?

--Is there ANYTHING I can do besides execute an all-cash purchase agreement to nudge this deal along?

I'm sure this has been discussed before, and if anyone can find those discussions, please share the links. Can some BP members please share their Operating Expense breakdown as %'s of the total expenses, NOT including debt service, of course. ie:

Insurance: 27%

Taxes: 13%

Vacancy: 14%

Utilities: 8%

Fixed Monthly Maintenence (grass, etc): 16%

Valriable Monthly Maintence (repairs, replacements, etc): 22%

Total Operating Expenses: 100%

Is there any common expenses I left out? What is your breakdowns?

Isn't your NOI "income - operating expenses", NOT including the debt service? If that's correct, by definition your capitalization rate should be 9.2% ???

You're right. I suppose without some kind of price, any agreement is pointless. I was just scared of executing an option that turns out being wayyyy too high and losing my deposit.

On that note, can it be a useful negotiation strategy to execute an option that you KNOW is overpriced, just to get the seller engaged and "agreeable", and then at a later date, chip away from the option price from facts about the property previously known to you or uncovered during the due diligence phase??? Is this a common negotiation strategy that works or does it often become a deal breaker and anger the seller?

I'm hoping a "letter of intent" would be easier to get signed. It carries less teeth and is less official than an option. Anyone ever buy themselves some time with a LOI instead of an option?

Thanks. So what's the typical hierarchy of supremacy for multi-family properties when it comes to vacancy risk and tenant quality? What makes duplexes so susceptible to poor quality tenants when compared to a 20 unit apt complex? Wouldn't they both be equally at risk for this?

Why would duplexes be a "strike"? I'm asking everyone who feels compelled to answer. Thanks!

What might the terms look like? How much might this cost? There's only so far I can take the offer-price-negotiation-phase before running out of my own money. This is a large multi-family property and will take lots of time to properly value before dropping an initial offering price, and I don't want to do that alone, but also don't want to be circumvented by my more experienced "helper"/partner. I want to lock the property down while I seek a more experienced investor to help me complete the valuation and initial offering process. Is this possible? What might this contract to the seller be called or how might it look if a price offering isn't involved? I'm thinking some kind of "letter of intent" with an expiration date. This is regarding an UNLISTED property by the way so there's a little less pressure on the potential seller and I can be creative with my terms.

If I uncover a big deal that's beyond my personal financial capability, what are some specific, safe, legal, and minimal-cost tactics to use against the seller/owner to secure my deal while I investor/partner shop? ie...secure the property for me and buy me some time to find a partner? Minimal cost is key...I need protection and security that the deal is mine to give me the most leverage when negotiating the equity positions among partner(s) I find without them circumventing me in the process. Thanks. Y'all are great btw.