All Forum Posts by: H. Jack Miller

i have been a private money lender for more then 30 years and would advise a great deal of caution. While you can make money and I have supported my family this way, I also have seen may, may crash and burn. I would start by co investing with someone who knows what they are doing and has done it for a long time. there are only a few companies that have done prior to the crash of 2008-2011. I would find one and coinvest with them to start with, you will see what they are doing and learn. You can take a fractionalized piece of a deal and that is a good way to start. Let me know if you have any questions, this is my area. I started @Geltfinancial in 1989 and we have done well over 11,000 deals for well over 1 Billion since then.

Depending on the size you may want to look into the Freddie Small Balance Multi family financing, i would find a broker that focuses on multi family.

Does the lease have any personal guarantees? If it does what's the financial strength of them. If they are strong, you need to hold their feet to the fire until you lease it to someone else. If not dont throw good money after bad in a legal action. Sounds like the equipment is the tenants, if so is there debt or UCC's on it. is so you can make a deal with lender and if you get a new food tenants yo take over payments, if not depending on what lease says and you do. It could be yours, maybe a nice perk for find another food tenant. Either way seems like you need to find a new tenant. 

from your side of it make 100% sure you do all of your normal due diligence, I would not depends on anything the seller tells you. You should independently confirm it. You dont need an appraisal.  You can use any title company you want. The sellers if they are smart should have an attorney who knows what they are doing draft the lending documents, but you can supply them as well if they will go with it. But always proceed with caution.

I would look online check our reviews and then look on Scottsman Guide, you can get an idea of who your dealing. But don't be fooled their are a ton of brokers, pretending to be lenders.

Jack

Very hot location with low cap rates. Curious to see what you find.

I would not use the word "Fair" I would ask what does a seller need to pay to get traction from good brokers.

That depends on the market, property type, inventory on market, timing and most important knowing the supply and if its a sellers market of a buyers. a few months ago I would say it was a sellers market and you could get a good broker to sell it for a flat fee of a small %. that maybe changing.

As a side, if its in Phila. I may have an interest. Please send me the details 

Not surprised at what I am hearing from you, There are a lot of GP's like this out there.  I would see what the operating agreement calls for, as well see if you have the contact info on the other LP's. I hope I am wrong, but its sounds like something is off. 

There are a ton of GP's out there and and lot of then lack the experience, backroom that's needed to be a GP. We deal with this all of the time. (One of the things we do is buy and lend on  non liquid LP and & GP interests) 

A good GP will be transparent and get bad news out first, but most are not good. 

A great market has made a lot of people look good and a lot of people think its easy.

I would press them on this issue.

The recent CRE market has been irrational and yes I have seen that. In my mind this is pure insanity from all sides. A total waste of time from all sides. We will see what the future bring, I am hoping some sanity comes back to the market.

We have a of mortgages in this market and all I know is the real estate taxes are increasing at a very rapid rate, much faster then inflation and the ability to raise rents.