All Forum Posts by: David Miller

You have 3 sources of disclosure: 1. Your purchase contract; 2. Any seller disclosures required under state or local law; 3. The brokers' obligation to disclose material facts about which they have knowledge - as required by state/local law and licensing requirements. See if any of those work in your favor.

You need to determine who holds title and has authority to sell (the executor or the heirs). Even if it is the heirs, you also need to know whether there any notice to creditors requirements that must be satisfied or other probate filings that are necessary for the heirs to sale the property free of potential estate claims. The heirs may need to provide an indemnification to you and the title insurer against estate claims that could encumber the property. I do not know the laws in TN but those are some basic questions you need to answer.

Prepare a loan package that you can deliver to multiple lenders - it should include the financials and a one page summary of the asset, its performance history and what you are requesting. It appears this is a residential duplex but I would still recommend Commercial Mortgages 101 by Michael Reinhard - it is a quick read and packed with great advice on how to put your best foot forward with lenders. There should be ideas that will be applicable to a residential duplex. If your time is limited, you might also try to locate a debt broker who can reach out to a wide breadth of debt sources on your behalf.

Dave Olverson I should clarify there is no mandatory HOA...there is a voluntary HOA that has no real authority with voluntary dues of $25/yr. they maintain some of the entrances.

I would second Jon Anderson at City of Oaks Law.

Hope Valley has a lot of million dollar plus homes but the neighborhood also has no HOA and it is 50+ years old, so there is an unusual diversity of home types and some older homes that need some TLC. The neighborhood is gentrifying with a wave of 30 something professionals buying homes. Overall, not a renter/investor paradise in my estimation but some limited niche opportunities may be available.

3% on both acquisition and disposition is high. The sponsor having no skin in the game is a red flag for me but I know others on BP have done similar deal structures that worked.

Unless it is a FHA loan or VA loan, it will not be assumable and a "subject to" purchase will trigger the due on sale clause of the mortgage. It sounds like a private money loan for the purchase and renovation is an option. once the property is improved, you could look at refinancing the private money loan into a permanent long-term fixed rate loan.

TJ Peterkin I work with developers and builders who do work all over NC. You need a good architect and engineer as well as a developer or builder who can assist you on the entitlement process, which will be extensive. You also will need good legal counsel for preparation of your declarations, counsel on complying with the NC planned community act (or fNC condominium act if you go with condos) and assistance with financing. PM if you want to discuss more.

I work on a lot of syndications and a $5k limit per person is a joke for a deal of any significant size. I expect some of the online CF sites will take on the management and reporting requirements for such a potentially massive group of non-accredited investors...but in the near term I see accredited investors remaining the go-to source of capital for private sponsors acquiring commercial properties.