All Forum Posts by: Mike Lowery

@Bill B. No I am not expecting the seller to bring $100K in closing costs to give me the property. No, the seller would not have to kick in $15K for a roof, just as I would not have a capital raise for a new roof. If I perform adequate due diligence, this should have already been thought of. The whole Tesla comment, yeah, I will not even bother with that.

In this scenario, the seller would not be stuck as my partner forever, the 70% owner would not take cash out, etc. Obviously I understand that a zero risk is impossible for the 'buyer' and said buyer would not just walk away from the deal. 

All that said, you made a lot of assumptions thinking you understand how I operate based on post merely looking to see if there were ways to get creative about purchasing properties. I simply made a suggestion. I do not believe in free lunch and this suggestion was far from that. 

Thank you for your response!

@Don Konipol

Thank you for your input! The example was just that, an example. I know it would be tough for lenders to not require the buyer to have some ‘skin in the game’. Also, the properties that are most sought after in this scenario would be value add properties where the seller is older, maybe wants to retire, or has other circumstances that make them unable to maintain, operate, etc the property as they have in the past.

I understand it’s not an easy method to deploy, however, I was merely looking for someone who may have done something similar.

Hello BP Community! 

I am sure it has done before and I am not thinking too outside of the box, but in starting to structure syndication deals, it dawned on me that if you could find a seller willing to carry back some capital, you could provide equity instead of debt?

For clarification, I will use an example:

Purchase Price: $1M

Seller Carry Back: $300K

Loan: $700K

Instead of a traditional seller financing deal, where the seller would take a second position to the bank, why not offer them equity stake in the asset?

I understand this is not ideal as most sellers are looking for cash and would not keep equity in an asset just to relinquish operation?

But in the long run, the owner is more than likely cashing out the equity they have built in the property while also continuing to earn cash flow from the asset. Not to mention the equitable position that could be passed down or capitalized upon at disposition. 

Has anyone has experience with this? Pros and Cons? Things to watch out for? Am I crazy?

Thank you for your anticipated input!

I am under the impression that there are three main 'arms' in syndication. 

Aquiring the deal/Operating the asset/Disposition 

If this person is assisting you in acquiring the deal and you are raising capital, then at maximum they would get 50% of that 'arm'

IE: 30% GP stake in deal. Individual assists in finding a deal, you raise capital, find lender, etc. then they would get 5% (or less) of the deal, leaving 25% remainging in the GP stake. 

Clear as mud!?

Dzung, 

Welcome to the BP community and to the Milwaukee market. I would be more than happy to share my experiences with you. I have owned and operated both single family and multifamily homes in Milwaukee since 2017. I am also a firefighter with the city, being assigned to various different firehouses and could provide an unparalled view of the specific neighborhoods. The neighborhoods vary quite dramatically, however, it all depends on your risk tolerance, local team, etc.. I have also sent you a colleague request and DM. 

Cheers!

@Jack Weatherly I own, operate and invest in Milwaukee. I would love to get together and further discuss your goals!

@Travis Hill

I’ll give you notes!

I am an investor in Milwaukee, WI and am looking to purchase a property in the Austin neighborhood on the far west side of Chicago. The property borders the Oak Park suburb and is between 10-20 units. I am interested in any property manager recommendations for that specific area. I manage my own properties in Milwaukee, so I have a good base of what PM entails and would like someone to have similar concepts and ideals.

Thank you in advance for your recommendations!

I am an investor in Milwaukee, WI and am looking to purchase a property in the Austin neighborhood on the far west side of Chicago. The property borders the Oak Park suburb and is between 10-20 units. I am interested in any property manager recommendations for that specific area. I manage my own properties in Milwaukee, so I have a good base of what PM entails and would like someone to have similar concepts and ideals. 

Thank you in advance for your recommendations!

Milwaukee is a great market, but if you are unfamiliar with the demographics and neighborhoods, it can eat your profits, much like the rest of the areas that you mentioned. If you want to chat more about Milwaukee, please feel free to reach out. I am investor and firefighter for the city and have seen the best and worst that it has to offer!