All Forum Posts by: Jacob Mueller

OK tracking.

Follow up question as a Note investor. Do you purchase notes in 2nd or 3rd lien position?

Hey ya'll, heard of a strategy that I wanted to see if you had any thoughts or experience handling. The goal is to generate cash for the principle by creating a promissory note on a piece of property the principle already owns which they then sell. Let's say it's either in 1st, 2nd, or 3rd lien position as well.

1) Has anybody heard of this?
2) In today's environment, what kind of terms would be acceptable?

Hi Michelle, we would like to learn more about what happened asap due to a pending deal. Is there any chance you’d be willing to jump on a call? I’ve sent a connection request on BP so we can connect privately. I’d like to hear what happened to you

@Michael Vialpando 

Investment Info:

Large multi-family (5+ units) commercial investment investment in Colorado Springs.

Purchase price: $775,000
Cash invested: $220,000

Found an on market rundown 5-plex that had been managed by an owner-occupant. At contract, the property generated about $4800/month LTR. There was an (legal) opportunity to convert the property into an STR. Since we didn't have enough funds to do the deal, we financed 100% of the purchased price with a combination of long term debt and a bridge loan. Our capital contributed to the renovation & furnishings. The property nets $120k+ per year with professional property management.

What made you interested in investing in this type of deal?

We wanted to use our experience as short term rental / Airbnb hosts to maximize or increase the value of the property. Take it to highest and best use.

How did you find this deal and how did you negotiate it?

Found it on market and negotiated with the listing agent and seller

How did you finance this deal?

We used a commercial bank and a private bridge loan.

How did you add value to the deal?

We renovated the entire property, bought furnishings, used a professional designer, and our own property management company.

What was the outcome?

CASHFLOW

Lessons learned? Challenges?

Learned it would've been better to do a full gut renovation rather than a patchwork renovation. We are consistently having to repair problems as they come up, specifically with the plumbing. Looking back, we should've re-plumbed and re-electrified the entire property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, our own team! Renjoy Real Estate for the brokerage side and Renjoy Rentals for the property management side. Banks love it when you use professionals so getting the debt was exceptionally easy.

https://www.renjoy.com/short-t...

Asking the wrong question. You should focus on maximizing RevPAL - Revenue per available listing. It's the combination of nightly rate and occupancy. If you want to get really sophisticated, you also implement a floor based on the depreciation of your assets on a per/stay or per/night basis.

Did you ever come to a solution here? Curious about the development of co-hosting versus property management...

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $251,000
Cash invested: $15,000
Sale price: $390,000

Bought an old run down house. From what I could tell, somebody had already tried to flip it but abandoned the project for some unknown reason.

How did you find this deal and how did you negotiate it?

A wholesaler believe it or not. First time for everything!

How did you finance this deal?

Hard money 100% and partnered with a contractor to finance the construction - only covered the holding costs!

How did you add value to the deal?

Finding the deal, financing it, determine it's true ARV, finding the end buyer

What was the outcome?

Sold to someone who's going to short term rent it!

Lessons learned? Challenges?

Old houses are always challenging... never underestimate their surprises!

Thanks for adding details @Steve K. and agreed. Any form of government interference with natural market pricing of rents is destructive and hurts the weakest the most. I appreciate our governors insight and understanding of the issue!

Super glad to see our governor taking a sensible stand on rent control in the state of Colorado! We need more sensible politics like this!

"The rent control veto threat was probably easy. As a businessman — and a somewhat wayward protégé of Reaganomics architect Art Laffer — Polis has a more sophisticated grasp of economics than his fellow Democrats. He plays Monopoly, they play Candy Land...

...Rent control is no different than any price control. When authorities restrain the value of a good, service, or commodity we get less of it. Former Republican President Richard Nixon inadvertently proved this by capping oil prices and causing fuel shortages in the 1970s.

Rent control has forever had the same effect. If we restrain the value of low-end housing, fewer will provide it. Restrain the value of mobile homes or the lots they sit on, and the owners eventually sell the parks to developers of strip malls and McMansions."

Colorado Politics