All Forum Posts by: Jeffery Holmes-Rice

I thank you for your time. The information that you have given me reflects my own sentiments. There are risks in this and every investment.  The best that I can do is offer a reward to compensate that risk.

I wanted to know if I was advertising this correctly or if I was being naive with my solicitation as before I was offering far less, but now I see that there is definitely a way to make this goal a reality. Thinking about and responding to you shows me that I know what I am talking about,  and further deepens my belief that real estate. This has required creativity on my part figuring out how to overcome all kinds of obstacles, and I know that there is someone, somewhere that is interested in my idea of partnership. For the right person willing to hear me out and think outside the box,  this will be a deal that grows their money and allows me a chance to start creatively investing professionally. For everyone else, it looks insane.

Ah, I believe that this is the issue. I'm asking for a partnership, it seems from your response you believe me to be looking for third note or another hard money loan. I desire to direct a silent partner's money using their funds as working capital and sharing the equity at refi as well as providing monthly payments, and I feel that I am able to better protect the silent partner with a partnership agreement as opposed to simply a private loan. 

As far as the property I would I be using to provide this return goes, I have negotiated seller financing in the amount of $17k over 34 months with terms agreed upon in our purchase agreement, and the hard money lender will only loan $100,000 since there is seller financing, but they do know that I have seller financing. Of the $40k I am asking for $30k Wil be used to cash out the seller, the other $10k is to be used as reserves for closing or major repairs until refi at which point the hard money loan is repaid. The CMA from the appraisor that I have supports the $200k arv and recently comps have broken $300k. They also show that the property is rented below market value. There aren't major repairs but there are some minor cosmetics, but you're right, I didn't mention that. I felt it would be too wordy and make me look unorganized, and since this is my first deal AND I am asking for a partnership, I felt it better to be as to the point as possible.

If I understand this all correctly, after paying the HML at refi, I would only have to pay back my partner. At the 5 points my HML company charges my loan repay is $105k, so I should have lots of Equity (I know, I know-if the ARV is $200k or more). The seller financing terms go on for longer than I would need the silent partners money, they are paid for monthly for 34 months, so the only one left is my partner. Again, to my understanding, I should have more than enough to safely get a silent partner out safely.

The last thing to address is the risk to a seller. I have considered this the most important detail of this deal and wouldn't sign a partnership agreement that didn't include some kind of deed of trust so that my interest in the property is transfered to the partner forgoing the need for forclosure in the event of non payment on my part. And also since I'm still green, to further compensate, I'm offering alot more of the equity that is already in the property from the deal that i negotiated to the partner.

I believe that I can do this and I think that I have worked out all of the possible objections that I could see arising. I am sure that, as long as the information that I have gathered here is correct, then this should be an amazing investment opportunity and profitable to all involved.

If I am wrong though, I would like to know. I just feel that with out knowing the specifics it's easy to pass up these posts, and maybe that's what I did wrong, not being specific enough, but I refuse to accept that I am not at least on the right track with this one.

This is what this place is here for.

 I think this is a strong deal, I'm not sure though

I have a 4 plex under contract that I will secure with a combination of hard money, seller financing, and private money. I'm having trouble generating interest from prospective silent partners, and since this is my first real estate transaction I wanted to know if I am being naive or just placing my solicitations in the wrong place.

Before I was offering a 40% ROI on a $40k investment with monthly payments for 12 months. I am now offering a 75% ROI on $40k ($800 monthly and $20k at refi + $40k original loan amount). I can offer this because I bought the property $53k under market, and its gross income is $3k monthly.

I have all of the info that a silent partner would need to see to make a decision,  I'm just not getting any bites.

With what I have explained, am I offering a good deal to a silent partner,  or am I being foolish? I post here and on craigslist, am I in the wrong place?

Thank you in advance

Hi everyone, I'm Jeff

I am at the last hurdle of my first deal. I have under contract a 4 plex that generates $2900 a month. The ARV is $200,000 and I purchase at $147,000 with $17,000 being held as a note by the seller. I am working with a hard money lender for $100,000.

I need $40,000 to close and have reserves for the property. I will refi in 12 months and cash out all other parties. The total repaid to a silent partner will be $56,000 ($800 a month-$9,600 in 12 months plus $46,400 at refinance. The high ROI is to reward the risk of loaning to a newbie.

I have a more formal proposal available upon request.  

Thank you for your time

Jeff

I actually didn't correctly run comps accurately , my confusion cleared a bit though after i did. For the multiplex (the other seller isn't motivated enough) the comps for 6br 3 ba units sold in the last 6 months are 188k, and i'm being offered 2 for 236k cash or 245k lease option w 50k down. The monthly expenses are about 1800 for everything less electricity and gas which the tenants pay. the units are fully rented and bring in $1200 a month in cash flow, which make the ROI 30.5 on a cash deal or 28.8 on a lease purchase after one year. I think this is a steal, even though the market is cool in this part of CO, i want to proceed, but if i should negotiate more, now is the time. if anyone could help with suggestions or opinions id appreciate it

Thanks for the quick response.

My estimations put the first property at about 225k. As i said, the people there are selling to build another house, so no concrete rental value to go off of, but average rent in that area is about 1400-1700/month. The owner owes 174k and pays about 1700 a month for PITI and utilities (including electricity, the association fee and heat fuel) and is selling it for that much OR with 4k down they will provide financing for up to a year after which they expect to be cashed out. as far as the subject to they are not looking to do anything like that. i was informed that if the property isn't sold by march they will short sell it, so my guess is that while they aren't necessarily hurting for the money, they don't want it tied up for an extended amount of time. for me this situation screams for a sandwich lease, as i will be flipping it to an end buyer within the next week, but if anyone has a better idea, i'm open to suggestions.

The second property is trickier. The market is colder, there have only been three sales of comparable properties in the last year so its a bit harder to confidently estimate the value of the property. in addition, the market is actually depreciating, but if i had to guess, i'd value it at about 230-250k. the owner wants 236k for both triplexes which are fully occupied with tenants that have leases up to about a year in length, but with the rental rates already above average, ($500/per month per unit) , its unlikely that i'll be able to comfortably build any cash flow in by quickly raising rent or improving the property without first driving a hard bargain OR going for a lease purchase, and offering closer to whats expected while receiving the sellers financing. In this case also, I feel that pushing for terms is the better option and will receive the most welcome reception, but as mentioned before, i'd listen if another better plan were presented

Thanks again

Jeff

I am currently dealing with two deals that, at least at first glance seem to be worlds apart in difference to me. i could use any advice you all have to offer.

One is a 3/2 sfr in CT. This property seems to appreciating, Its in a desirable suburban area just outside of Manchester located near decent schools and it appears to be a good neighborhood. The clincher for me is that the sellers are VERY motivated to sell and be rid of this headache before they relocate to FL, so much so that they are selling for what they owe AND considering Lease Purchasing to me for up to 1 year. In addition, as they won't be moving right away, the owner suggested to me that I purchase the property and have them rent from me until their new house is built and they can move into it. This one seems straightforward to me as a good deal to wholesale, as it'd be attractive to an end buyer looking to acquire a property without tying up a lot of capital.

The second is two adjoined triplexes, all 2/1 in CO. Now the market here is far more stagnant. However, there don't appear to be any social/economic factors associated with this; this neighborhood also seems to be a nice place to live also. The building is 3/4 occupied not counting the owner and his mother, both of whom I've been informed will be looking to move soon and both bring in 3k per month altogether. The issue here is that with the market being slower, and the owner already charging more than the average rent for the area in a depreciating market, i'm not looking to commit to the full desired offer of the owner which is about 60k over what is owed on the property. In my mind there is not enough equity being offered for it to be a safe investment, and if something were to go wrong, the whole deal would fall apart on me. I'd like to offer this owner a lease purchase deal also, reasoning that I'd be far more willing to pay closer to the desired price if I get favorable terms that would allow me and ultimately the end buyer to hedge them self against further depreciation and essentially hold the property until the market turns around.

This is what I've come up with, if anyone else has an idea i'd love to hear from you

Jeff

I also found a 4br 3ba sfr in the West Pullman in Chicago that I want to rehab and eventually rent out. I estimate around $30k in repairs and $1100 is owed in back taxes but no other liens. Property comps for the immediate area are around $100k. The property is listed at $12.5k and i am asking for $43k. Can anyone help me at all with this? Thanks again!

Hello everyone!

I am looking for some pretty specific things and I wondered if anyone could help. I am looking for single family homes in Chicago: distressed or foreclosures are fine, but clean titles are a must. I am also looking for properties in the Bolingbrook, Romeoville, Plainfeild, Crest Hill, etc. area. Again, fixer uppers are ok, but clean titles are prefered. If anyone could direct me to these types of properties i would appreciate it

Thank you for your time
Jeff