All Forum Posts by: Jake Engle

Thanks for all of your thoughtful input Gilbert! 

The deed is in the ex wife's name. Part of the divorce was for this building to be purchased with him paying the mortgage and it strictly being her on the deed. This property was purchased for the current deed holder to run a flower business out of. For the last 10 Years, she ran a flower business. There is a shop and then the large storage area with loading dock in the back. She has never lived at the property.

Over the course of her time running the business, she has had a tenant in the one 3 bedroom apartment. He was paying 500 a month up until two years ago. The rent INCLUDED oil heat, water, and trash. She just recently raised the rent to $800, but is still losing money because of the oil costs to her. This rent is being charged in a market that could support 1000-1200 with utilities being paid by the tenant. She is not made out to be a landlord and has no desire to keep doing so.

The other apartment has been vacant and needs to be finished.

The current owner (deed holder) closed her flower business down so she can stay at home and watch her grandchildren. She isn't in a desperate money situation by any means, and likes the idea of getting monthly payments for a long time.

I realize that the deal needs a lot of analyzing. The bottom line is, is that at some point, the deal would have to make sense. There is no current asking price, and she really has no other options in her mind. It is strictly myself as an option, and whatever offer I come up with will still be a better option than she has leaving it vacant and losing money. 

I could also leave the property as a store front on the Main Street, but parking is scarce and I don't believe it would be highly sought after by businesses.

Sorry for the rather unorganized post. While this certainly may sound like a pipe dream, there is significant motivation on the other end, so I would love to be creative to make this work.

Thanks for your reply George. I don't anticipate paying any more than $250,000. Put into a payment over 30 years with %5 interest and taxes included, I'd be looking at $1,900 a month. I believe the owner will be willing to accept any number I come up with, I was just hoping to get a max that would make sense for me to pay.

The storage idea is certainly one that I am really considering as well. What I failed to mention as far as the back storage area goes, is that there is a loading dock with large door that currently provides entrance to the area. It is a huge space and could definitely be profitable as is being a storage unit, or numerous units.

Well that was going to be my next post on this subject. I am not exactly sure of the best way to handle the situation. The seller is literally open to anything and just wants to get rid of the property. I thought her providing the financing in this situation would be the best solution to her problems.

I obviously have a lot of kinks to work out. I know that it can be very profitable with the right structure. I am not rushing into anything and have a lot of analyzing to do. I appreciate your feedback and welcome any further suggestions.

Thanks for your input Brent. That is another thing that I know I have to consider and look into.

I am in the process of analyzing a commercial property that I have an opportunity to purchase with owner financing and no money down. The property is a store front, with a large storage area in the back and two 3-bedroom apartments above the store. One of the apartments is in good condition and has tenants, while the other apartment is pretty much completely gutted and needs to be finished.

My plan is to convert the store (approximately 2000 sq. feet) and the back of the store (another 2000 sq. feet) into two more 3 bedroom apartments.

When all is said and done, I anticipate the numbers to look like this:

Gross monthly rent: Conservatively $4,000 (although $4,800 is realistic)

Taxes: $6,500

Financing: owner is desperate to be done with the property and is willing to finance a 30 year mortgage at 5% interest with no money down. I know you are asking why doesn't she just sell. The fact is that she went through a messy divorce with a very wealthy man and he has to purchase this building for her. He financed the building and still has 11 years left on the loan. If she were to sell the place and the bank took the payoff, she believes he would never pay her directly.

Rehab: I am in the very early stages of getting estimates on the rehab costs. This is a major undertaking that I anticipate costing in the ballpark of $100,000.

I understand there is a lot of info that is missing and factors to consider, but if the above was accurate, what would be the most you would be willing to pay for the property? I am in the early stages of trying to put an offer together, but any of your expertise would be very much appreciated.

thanks for the replies. @J Scott , we both just read your flipping book to prepare us to get started. If I read correctly, wouldn't one contractor not being on the job on the specific day that you scheduled them delay the whole process? I certainly need to be able to trust the contractors, but just starting out will certainly take some trials with each contractor. Great book by the way J, we feel we are ready to go and are in the final stages of locking down some private funding.

Thank you Don and Nate. Some great info. Don, I am glad to hear that somebody else is utilizing this service. I don't plan on using it as a way of babysitting, more just to make sure contractors are being accountable and on the job when they are supposed to be, to not delay the whole job.

My partner and I are currently building our fix and flip business plan and are hoping to get our first rehab in the next month or two. He will be responsible for the rehab and working with the contractors. I will be able to be at the rehab one or two times per day, and he will be able to stop in at the end of the day or during his lunch. We were considering utilizing surveillance inside of our project to monitor the work being done and ensure the contractors are actually at the property. I am not talking hidden cameras everywhere, just a single camera at the front door to monitor who is at the property working. There is a product called drop cam where you can monitor the camera through the internet. Would just have to plug it in and connect to the wifi.

Obviously the extra expense of having an internet connection is a downfall. But could this work to keep the contractors on their toes and ensure they know they can't lie about being at the property? Any thoughts would be appreciated.

I have just sent out my first group of probate letters and was hoping some of you seasoned probate marketers could give me your advice. I created a brochure for my LLC to outline all of the benefits that there could be to selling the property within the estate to me. It is a professional looking brochure and I also include a personalized letter specific to each estate. On top of including both of them in the mailer, I have also been including my business card as a licensed real estate agent. I was hoping the inclusion of all of these will show estate representatives that I can offer numerous services if reaching out.

I am about to send out another group of letters to different probate leads, but was wondering if any of you have suggestions whether my thought process makes sense. The more I thought about it, I wondered if this comes off as too non-personal and seeming like something that is just mass produced to send to everybody. Do you believe I should just be including the personalized letter by itself? Thank you for any input you could provide.

Thanks Dave and James,

That is great info to know. I will check with a hard money lender if they are requiring a Proof of Funds.