All Forum Posts by: Jeff Greenberg

Dean Chan works out of Houston and he specializes in CRE 956.827.1415 He is good at finding off market deals

Joel has shown how the calculation is done, but no you need to look at your requirements. What are your goals for this property. Are you looking for a specific cash on cash return or are you just looking to pay off the loan for a cash cow down the road.

The owners numbers may or may not be an indication of what your expenses will be. As Joel stated he could be padding for tax reasons or he can be using cousin Ralph to fix the ac and paying him with Friday night dinners.

We have seen expenses running 45-65 %

Never offer the asking price unless the market is really tight

Welcome Stephen, you've come to a great site to start your education. There are plenty of people on this site that can help you on your way.

Welcome fellow Californian!

All bills paid (property pays all ultilities) will add about 10% to the expenses.

Welcome to another Californian living in the great weather, and investing where it makes sense.

Welcome

Personally I would look at the small MF where you can get professional management. Read some of the previous forums as to the arguments of MF vs SFH

I see several issues here.

1. The 25% down is not the only capital neccesary to close this deal. Make sure you factor in closing costs including, lawyers fees, loan origination fee, mortgage broker if you use one, SEC attorney if this ends up being a syndication, funding operating account, utility deposits, capex reserves if required by the lender, required immediate repairs, etc, etc,

2. Commercial loans usually require a net worth equal to the loan and liquidity equal to 10% of the loan. This varies lender by lender. Your big pockets may be interest in signing on the note with you, but for a price.

3. As said earlier you may be hard pressed to get an investor that sees the best case as a 8% return and return of his capital, while the down side can be a loss of all capital and if he signed on the note, damage to his credit. Uncle Jim on moms side may take the risk. The bank may not go along with the second.

4. A way around the "no second" requirement of a lender is to give the investor an cashflow/equity position. The lender is more likely to accept this and your investor has potential upside along with thepotential downside. As mentioned earlier, you could have a buy out clause, in the operating agreement of the purchasing LLC. (Form a new LLC to own the property and in the operating agreement set your LLC as the managing member). Your investor is a limited liability member. Yes, you will be jumping into the SEC's pool. Make sure you know the rules.

Finally you may have to give up more than you wanted to, but a smaller piece of a big pie, is better than no pie. There are some on this forum that would suggest that you start with a smaller property and that is a viable option.

Hi Brandon,

Yea there is a little bit of distance between the two. But since you are a local, I have a Commercial Real Estate Mastermind group that meets in Woodland Hills if your interested.

I am underwriting some MF properties in the Houston area and am looking for some eyes on the ground. I currently need someone near Pasadena and Beaumont. No experience in MF needed, but it certainly would be a plus. I have brokers, and PM's opinions, but I also like other eyes on it before I move forward. Anyone with a goal of moving up to larger MF will benefit from this process.

Please contact me privately or post to this forum

I agree with Ned's points, you need to remember that you are providing (not selling) an opportunity to invest in RE and get returns not readily available to most investors. As a syndicator we provide most of the benefits of RE investment (Cash flow, depreciation, appreciation)without the headachs.

Be carefull how you structure your deals to make sure that you are in compliance with the SEC.