All Forum Posts by: Ellis Hammond

@De Van Do @Dan H. is the man. Lot of wisdom in the above. 

I also own a duplex here in San Diego and it has served as our first home as well but like yourself I am looking to scale our portfolio and to get the most cash for our next purchase. We have decided in the coming months our best option is to sell and use that cash to roll into something bigger. 

Also worth noting, the equity you have (myself included) is not going to be enough for a downpayment on 5-10 units here in San Diego. Most banks are wanting 40-45% down for financing here in San Diego or to really stand out in a competitive market one can offer all cash. 

Id be happy to talk more about making that transition into larger apartments and ways we can bring value to each other in this process. Reach our directly and I can share my info. 

@Eddie Delaney when you catch a break skip over to San Diego and lets paddle out! Love to connect more. My background and focus is on raising capital. Reach out to me directly and would like to hear more about next project and ways to add value. 

@Jim Growfer id like to know how this goes. I am also putting together a deal and considering the offer terms. I think 8-10% on his/her money and a 50/50 split on a kick *** deal would be a huge win for a passive investor! Is it fair?... that’s a no win question. Focus on providing a great product for your investor.

@Keith Shadle would love to connect. I am also local to San Diego and have invested out of state on a large MF deal and looking to do more deals close to home. 

If interested in talking reach out to me directly.

Cheers!

@Jay Hinrichs @Matt Faircloth @Chris Tracy the idea of family offices has been raised. Any input here? What is normally their criteria both for deal and for operator? Have you ever worked with a family office and if so how did you begin that relationship?

@Emily Bolander the grade of the neighborhood is subjective. You hear that language often bc its gives a relative picture for investors to talk about the property or area (as was helpful in this thread).

Best way to think about this is 

A class- "Id like to live there"

B class- "Im okay to live there. "

C class- "id live there if times were hard. "

D class- "Id never live there." 

E,F, F (whatever you want to call it)- "id rather be dead."

Sounds like you and your husband are hard workers and not scared to get your hands dirty. Take that mindset and go look for this same property but in a C or B class neighborhood. That way you get the cash flow and the appreciation over time. I don't think there is enough cash flow from a $500 per month duplex that would justify the future headaches of this property. 

Best of luck. 

Ellis Hammond

@Jason Postill I like what Ivan said in that try and take action as fast as you can. I also started with a duplex and recently just closed on a 144 unit complex. 

Duplex was a lot easier for me in the early stages to take action. Get a win under your belt! If you can find a good mentor then maybe you could start bigger. 

Ellis Hammond

My veteran flipper friends would say 50/50 is a fair split. I haven’t seen many go much further than this.

Another idea: why not pay him a fixed rate of return, say 8-10% during the hood and then a small piece of equity on the back end? If you can keep projects going, then he/she might prefer the consistent income and you can keep more equity that way??

Really not sure what your #s would look like just trying to think outside the box.

Good luck @Jeremy R. Henley!

sorry @Jim Growfer. not even close to enough info here. What kind of loan? single family, commercial, hard money? 

A quick google search for current interest rates on the type of loan you are looking at will prob give you a better ball park to help in your underwriting for the time being. 

@Jim Growfer try looking at other broker pro formas in your area for places on market to get more Familiar with accurate expense ratio. You could be missing out on a lot of deals if you are using 50% for expenses and most places in your market are operating at much lower. Also, if you have built a relationship with mortgage broker, you can send them a deal you are working to get more accurate # as well. If you try and take shortcuts you will miss out on deals.