All Forum Posts by: David Walkotten

@Matt Popilek Build your own rent roll and T-12 with the information you glean from the seller. Otherwise estimate. Just request that you sign off on the numbers as true and accurate per the information you received. Ask for tax returns. If there isn’t anything available, just build your t-12 like a pro forma. Good way to get a bargain and eliminate people who aren’t patient and willing to put in the work.

@Maxwell Manatt congrats! I’ve got a 40 closing in 2 weeks. Here’s a spreadsheet I use on an annual basis and to analyze a potential acquisition that should be helpful. https://docs.google.com/spreadsheets/d/1KyxuyCYIe7MwFJ6Tumqu14ZgyA-nN305GvUCP0qcnnI

@Dan White Rent comps are around 1100 for 2-bed apts in the area it appears. Plan on some tenant turnover time (6-months). If you have experience in commercial deals and a current portfolio with good numbers, you can probably get private equity for your down pmt and a local commercial bank will finance the rest. 100% financed. Otherwise it’s easiest to bring in a 25% equity partner into the deal and pay a small preferred return to him/her. It will be hard to raise 400k in pure private money unless you have a large network of private investors. Sounds like the numbers could be too tight if you have 700k into it and gross monthly rents are 8800.

@Mark Kuster Some property condition issues came up and so those had to be resolved prior to a rate lock/commitment. Some of the ceilings had drywall glue that failed over 40 years and 3 ended up falling. Because if the liability, Freddie put the deal on hold. City inspectors came through and it ended up being a full RE-certification process. Because of the length of time the deal was with Freddie’s loan review committee, we had to resubmit it.

I was able to sign one last Addendum thru 9/21 - the Addendum states that it will release the property if we do not close by then. It cost me another $30,000. 

Thanks for the input guys! The deal has been resubmitted to Freddie Mac and should close 9/18. 

What is the income potential? Current rents are supporting maybe 1.25M PP 

@Roschelle McCoy your bottom number is your cash flow. Take your cash flow and add back in your annual debt service. You should get around 45k. Take 45k and divide by your cap rate. 800k-ish?

@Caleb Heimsoth I’m not- my equity partner is injecting the capital for down pmt and reserves and receiving a preferred return. I have done quite a few deals - currently have 47 units - this wIll be the biggest though.

@Caleb Heimsoth that was a thought. I do have the 50k it just makes the deal tighter and I already upped it 30k for extending it thru August.

@Justin Fishman the deal is submitted to Freddie’s committee and it takes 8 business days to review and get the commitment. Then another 3 days to close. All repair issues have been satisfied and the deal is ready to close. Seller’s management company just took too long to complete the repairs and get thru inspections