All Forum Posts by: Daniel Mohnkern

@Rebecca McDonald I closed on a duplex 3 weeks ago that was completely seller financed. There are many options. Keep hunting. My biggest advice would be to learn the art of negotiation. It opens all kinds of doors.

@Jaysen Medhurst

The seller is running a charity. Rents are 20% below where the should be, two of the storefronts are paying only 25% of what they should be because he is "in tune with their cause".

Also, the full basement is totally unused. I am going to turn it into rented storage space. There is a need in the community with the nearest one being a five minute drive away.

There are also two rooms in the residential area being used for personal storage. I am going to turn one into a coin laundry and one into a 3br rental.

@Jaysen Medhurst

Thank you for your response and advice.

The seller is in his 80's and is selling to leave a simpler inheritance to his children. He would not be willing to finance over 7 years because of his age, hence the balloon. Having him willing to finance in that manner gives me the ability to do the nothing down deal. I will then brrr it, refinancing at the 7th year, using its equity as my down payment.

@Jaysen Medhurst

Thanks for the input. I have seller financing. That's how I got to 100% financing.

I will adjust the vacancy rate. Good point there. Thanks.

The cap rate in the area is a bit High. Most people from the town work an hour away but the people here live here on purpose because they like being in a smaller town so it's a bit of a bedroom community. Cap rates are around 10% in the area.

Thank you also for the input on management expenses. I suspect you are saying 10% of NOI, correct? I have a manager of a couple of duplexes I have who is giving me a quote of 4%.

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*This link comes directly from our calculators, based on information input by the member who posted.

Owner is in his 80's and "selling to leave his kids with a hassle free inheritance."

Needs very little initial repair(paint in 2 hallways, some drop ceiling tiles, and a few more light fixtures).  Outside of the building is all brick except some trim that could use a coat of paint.  All units are in good shape for now.  Roof will need replaced within 10 years (about $20,000 according to my contractor).

Area is in a somewhat depressed area of the rust belt, but has very low crime, no gang presence, and good pride of ownership in much of the town(think "Groundhog Day" type community). Property is fully rented except for one vacant storefront.  2 of the 13 tenants are Section 8. 

Be hard on me here.  What am I missing?  Too good to be true?

Well all, thanks again for your input on this deal.  I closed on the property a couple weeks ago and just collected the first rent checks!  I'm putting $200 per door in my pocket each month on this one!  Exciting times.

@Tyler Speelman, if they're willing to prepay for their term, why in the world would you not let them do that and leave? It can only be a win for you. You get paid for their stay there while they're not there and you can put other people in it during the same time.

@Pope Lake

Why not just mitigate that risk by giving them an offer that would be a winner in either market? You do not know why the seller is actually selling. You only know what they are giving you for a reason. Perhaps their personal market is lower than the rest of the market. You would only know that by having them accept an offer. Stop giving yourself a reason to procrastinate and make offers that will be winners for you when they are accepted.

@Melanie Hartmann

Realize, before getting too angry at the naysayers, 99% of them never read any of these comments and are just responding to your original post. So, the fact that you've already explained that you are the boss of your life and that you are awesome has gone completely over their heads. I agree with your reasoning wholeheartedly and I'm very excited for you. If anyone will, you will get it done!

@Jonathan Hulen

It depends. Everyone's situation is different. I, personally, just this month, went from full-time to part-time for the exact same reason. I decided to stop working so many hours on my W2 so I can focus that time on real estate. The industry I am in was demanding 80 to 100 hours a week. That was enough 2 put me in a prison. I had absolutely no time to meet with anyone concerning real estate, investigate deals, meet with anyone professionally during business hours, Etc. Sometimes less money and more time is the way to go for the long game.