All Forum Posts by: James Johner

@Kevin Sack

Hey Kevin. I do have some finished photos. Unfortunately the app won’t allow you to post photos in the forums. 🤦🏻‍♂️ maybe one day?? @Brandon Turner

I’ll shoot you a PM and see if I can get some to you and we can chat.

@Ryan Barnett

Do it!! Plenty of opportunity out there no matter where you are in NC. I am on the coast and did a few duplex flips in the Jacksonville market a couple of years ago that worked out well. What market are you in?

@Hunter Lisk

Hey Hunter, there are tons of different scenarios when it comes to owner financing and as mentioned by others it can be a rare occurrence for someone to agree to. One thing to comment on from your question is getting 80%ltv from a bank and 20%seller financing is an even more rare occurrence as most banks won’t loan unless you(or an entity that you are a part of) actually put in your portion. In other words a bank will only loan on 80% of the “net amount due at closing” not of the actual purchase price.

There are however many different ways to present seller financing to motivated sellers to get them to consider the deal. Show them the upside of them being the “bank” make a Multiple option offer rather than just one. For example-

1. $1m purchase price. Cut and dry.

2. $1.2m purchase price; $25k down. seller financing on net amount due 60 month balloon fixed rate etc etc etc

3. $1.25m purchase price; seller financing on net amount due etc etc

Show them the value of being the bank and how you can “afford” to pay them more for this property if they are. And if not you can get into a better acquisition cost of not.

@Anthony Johnson

Agree with @Greg Dickerson. Some other things to keep in mind. Things will change, they won’t go exactly as planned. Stay flexible and be ready for some curve balls. Keep in mind that most debt products will require any owner with 20% or more in equity will have to sign on the loan. With a management company in place it will help your odds with financing. I would build a professional summary to keep on file and send to banks/investors that clearly explain your goals and buying criteria. The more sophisticated you are/appear to lenders and investors the easier it is to get your foot in the door.

@Mary Mitchell

Thanks for the questions. We will renovate as we get turn over. We are bringing rents up to help clear out some units.

Cash flow...Yes. Every deal cash flows from the day we buy it and we only leverage 60-70% of ARV. No exceptions.

@Mansi Kothari

Surrounding myself with people doing bigger things than I am. Don’t over calculate the steps. Just move forward. Go to a conference. Read as many books as you can. And go do it.

@Tj Hines. Agreed.

More important thing to consider is not how much you can leverage the property but how much can you realistically afford to leverage the property. The goal should be to stay at “nonspeculative” as possible. Even if a lender is willing to leverage a deal to 80-85% does it make sense to do so is the biggest question. Protect the back side of the deal. Have a solid plan in place to cover the debit liability and understand it is a long term asset.

@Vishesh Shah

Well worth it when we attended. I’m no expert in this game but I’m not a beginner and the majority of the people there were years shared of me in their experience and over all knowledge level.

@Michael Love

Cold calls, direct mail, door knocking.

Long story short direct to seller. I spend hours on GIs mapping and tax records sites and filtering through Secretary of State filing documents to eventually find names, addresses, etc and hunt through social

Media and people finding websites to get phone numbers, email addresses etc.

put in the work and you will have deals Coming in the door. Most importantly, be ready to close, build your reputation accordingly.

Update on this post to keep it valuable.

We dug through all the records on this property and we were having a hard time justifying some of the expenses. Long story short, we helped the current owner expose some dishonesty in his management. This provided a HUGE forward momentum and trust between the owner and us.

Here is the new deal structure.

We will buy into existing property at 67% owner, keeping the current owner in on the deal as a 33% partner. Leverage the property under new ownership entity at 70% LTV, use this capital as the "buy in funds" current owner walks away from deal and collects his 33% for a set period of time and as agreed in operating agreement will give full ownership over once he collects final monies from agreed upon purchase price.

Financing will be Agency debt and renovation loan.

PP 1.4m

Reno budget $864k

All in cost 2.264m

ARV 3.9m

Equity created 1.6m+\-

CAP rate as basis 8%

Total cash out of pocket.....$0

Man I love this!!

Keep crushing it everyone. I will update once this all goes through! Hunting more deals now.