All Forum Posts by: James Berry

Thank you for the feedback. I agree that something like a private mortgage sounds better.

Do you or others on the forum have recommendations for structuring a “sell & stay” deal?

Hello BiggerPockets community!

I have a unique opportunity to acquire some real estate and am not sure how best to structure the deal.

I’ll outline the opportunity bellow, then present the outcomes we’re looking to achieve and provide to the seller.

I’ve considered some creative financing options already, but am new to this level of real estate investing and would appreciate any advice this community could provide.

OPPORTUNITY

- 115 acres adjacent to property we currently owned. (e.g. contiguous)

- Comprised of 4 parcels:

P1 - 70 acres with 2250sqft 200yo house and 20yo barn.

P2 - 35 acres with under conservation easement.

P3 - 5 acre minor sub division home lot

P4 - 5 acre minor sub division home lot

SITUATION

- Seller is 70yo and retiring in 2019

- Seller has heIrs who are absent and uninterested in owning the property (will eventually sell inheritance)

- Seller is a frIend and neighbor of the famIly

- Seller (and our famIly) have preservation/non-development hopes for land in the neIghborhood

OUTCOMES

For the Sellers:

- Immediate cash lump sum (property needs some work)

- "Guaranteed" monthly/annual payments for deal term

- Retain ownership and occupancy of real estate until they vacate

- Seller retains ownership if buyer defaults

- Continuity of neighborhood legacy

For the Buyers (us):

- Acquire property rights

- Fixed sale price

- Known caretaker/occupant

- Continuity of neighborhood legacy

DEAL OPTIONS

- $450-500k sale price

- 10% down

- 20 year term

- 0% Interest

- Land Contract

This seems like a good option to consider in terms of managing tax impacts to both parties, but at the cost of fewer “ownership rights” for both parties.

- Seller Financing

This seems like a good option to consider in terms of better “ownership rights” for both parties, but at the cost of trickier tax implications. (Imputed Interest, etc.)

In case you're still looking for an answer here, there are a number of ways you can get this additional information.  This is not exhaustive, but here's what I know of and have used in evaluating deals.

MLS Fact Sheet - This is likely what you already have, but for multi-unit listings there is typically additional information about expenses and specific units. Direct from the MLS system is best.

Disclosures - Some disclosures contain a "Multi-unit Rider" which will have some information about expenses and specific units. Just request these from the listing agent.

Financials/Books - Financial reports from an individual or corporation describing the financials of a particular property. Depending on the deal you might be able to get these just by requesting them from the parties involved, though usually with some kind of NDA.  Alternatively, you can add a contingency to your offer requiring these documents.

Schedule-E/Schedule-C - These are the specific sections of a 1040 tax filing which will list the officially reported expenses for a property.  You can try requesting this from the listing agent, and/or add an offer contingency.

In terms of what numbers you can trust, I've listed these from least trustworthy to most trustworthy. MLS can pretty much say whatever it wants, and depending on where you're getting your data, the completeness can vary wildly. At the other end of the spectrum, tax filings are what have been reported to the government, so there are bigger issues there if those are incorrect.

I hope that helps.  And if anyone else in the forum wants to chime in I too would be interested in more thoughts on this.

 I only use rent-o-meter for rough rental rates, not for other expenses.  Note though, that the data can be wildly out of date, and you have to look carefully at the "comps" being used, since some of them are likely in other areas of town, and may not be representative of rates in the area you're looking to buy.  It's just a quick litmus, and that's the reason I use the low end of the range.

Great questions Axel.  I'm looking forward to the answers from the community.

I'm not much further along than you in learning about these kinds of tools and mechanisms for finding property, but I'll share what I've been doing in case it's helpful. I've mostly been searching Realtor.com and other MLS sites as well. For listings without any useful information I've been using listed price, rent-o-meter rents (I'm conservative and use the low end values, and my conservative estimates for expenses, to run an initial analysis.

I've found that most multi-unit listings contain some data about income and expenses, but you might have to dig through the details to find it. When I find something that meets my criteria, I've been reaching out to the listing agent directly and requesting a copy of the MLS Fact Sheet. In theory this is the same information posted in the online listing, but I've found more often than not, the Fact Sheet contains additional important details. You might also get a "Multi-Unit Rider" as part of disclosures if you request those.

I've also been building relationships with some Agents who specialize in investments. They are far more familiar with investment property than a typical RE Agent, and so far they've all had their own investment portfolios on the side with other investors.  They're not an immediate resource for deals, but if you build a relationship with them and can bring some value to that relationship, there's a possibility of working with them on some deals in the future.

Cheers - James

Welcome Karianne!

If you haven't already checked it out the ultimate beginners guide is a great place to start.

http://www.biggerpockets.com/ubg

Also, the J Scott Books on Flipping Houses (and Rehab Estimates) are awesome!

http://get.biggerpockets.com/flippingbook/

I'm also just starting out on my REI journey so I don't have a lot of advice to give, but I'm a NH native and looking to build my buy-and-hold portfolio in the state. I'd love to connect and see if we can help each other out.

Cheers

- James

Thanks everyone for the warm welcome!

 Thanks for the warm welcome Larry!  I'm really looking forward to engaging with the community.  My Keyword Alerts are all set.

Hi, my name is James.  I'm originally from New England, but now live in the Bay Area.  I've been learning bits and pieces of real estate investing over the last 3 years, but have only started really focusing for the last year.  And now that I actually have meaningful questions, I've come to the best place around to hopefully take my learning to the next level.

My plan is pretty straight forward (at least I think it is :-).  I'm an employed, high income earner, looking at buy and hold real-estate as a means to diversify my investments and generate passive income.  I'm interested in multi-unit residential property in New Hampshire, and Vermont as I plan on relocating to that area with my family in the next 5 years.

Other than continuing my education, given that I'm remote, I'm also interested in networking to put together a local team of agents, financing, and management. (Anything I'm missing?)

Thanks

- James