All Forum Posts by: Drew Leonard

With the current list prices in the DSM area, I find it hard to believe how purchasing a $50k-65k/unit is yielding positive cash flow. I'm not a seasoned investor there just yet, but I'm looking for my second 5+ unit there (distressed/value add property) and have been a bit baffled. I was presented with a 12-unit property (at about $60k/unit) and was nearly laughed out of the room when I suggested something closer to $45k. Saw a recent MLS listing for just shy of $60k (granted, in Sherman Hill) that was advertised as needing a full interior renovation. Obviously it may not sell for quite that high, but still.

Thanks, everybody. I received a number of other leads outside of the post and am pursuing those. 

Drew

I'm looking to cash out refinance a 5-unit property in Des Moines, IA at 75% LTV based on the appraised value. I estimate the value will come back around $225-240k, which of course doesn't meet many lenders' minimums. I've reached out to community banks as well, but not getting much traction or the terms I need. Anybody know of a lender that can provide a commercial loan with those terms for such a low amount in Iowa?

Thanks,

Drew

Appreciate all the additional thoughts. Obviously folks on both sides of the fence here. I always hope for a clear cut answer, and always find out it comes down to each investor's personal preference/tolerance on this stuff. Thanks again.

Thanks for the replies. This is yet another wrinkle in what has been a fairly odd negotiation full of some odd requests, none of which give us confidence that the seller isn't trying to hide something.

Trying to get under contract on a 5-unit, and only basic table of rent, expenses has been provided. Seller adamantly opposed to providing bank statements for income/expense verification. Is that a huge red flag? Are folks requiring bank statements to help ensure you’re not buying a property full of late paying/non-paying tenants?

Thank you for the replies. That's the feedback I'm receiving from the agent as well. Will hopefully find out today what the Seller thinks of the offer and go from there?

Looking at two properties on a package deal, both 5+ units. They are both converted single family homes, and three years ago were reclassified from Commercial Multi to Multi-Residential according to the County website. I am looking to stick with commercial properties and commercial loans through an LLC. Any experience with this, and can I keep with the commercial route?

Thanks, everybody. Really appreciate the thoughts. While SFH are 2-4 unit MFH are great for some folks, it sounds like most folks end up migrating to larger MFH deals once they're more comfortable and able to do that. That said, I think we need to bypass that phase and get into commercial MFH out of the gate here so long as we approach it correctly.

My business partner and I are both newbies, but he can bring substantial funds to the table such that buying a larger apartment complex could be possible (upwards of a $1MM purchase price). We were under contract on a 4plex, then looking at some SFHs, and now we're entertaining a larger investment. So we've been all over the map and are really suffering from analysis paralysis at this point. We had started out with BRRRRs in mind, but perhaps that wouldn't necessarily be required if we had a larger, strong cash flowing property. Our initial goal is pretty modest; looking to replace our current incomes about 12 years from now (much sooner in a perfect world) and work if/when we want to from there on. Hoping the BP community can share some insight on whether or not starting with a larger investment is a wise move, is it better to buy 5 10-unit properties instead (for example), etc. Thanks.