All Forum Posts by: Jehon Bendokas

Investment Info:

Single-family residence buy & hold investment in Fayetteville.

Purchase price: $150,000
Cash invested: $20,000

FSBO, Seller-financed, 0% down, 0% interest BRRRR-to-be. This will be my first remodel from a distance (previously I've done all my own work).

Remodel for $19K

Rents for $1750. First self-managed property using Zillow Rental Manager.

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

I invest in rental properties. My wife's family is from this area and we find ourselves visiting at least once a year. This property provides a great reason to turn those family visits into acceptable tax deductions.

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

Family member decided to sell and I made a competitive offer. They agreed to seller financing at 0%.

How did you finance this deal?

Seller Financed over 20 years.

How did you add value to the deal?

Hired a recommended contractor in the area to apply lipstick to the property and improve functionality.

What was the outcome?

Currently rented. Will refinance after some more appreciation gain and/or lower rates.

Lessons learned? Challenges?

Biggest challenge was being deployed in Iraq during a bulk of the remodel. Additionally I reached out to several property managers that told me the place wouldn't rent for more than $1000. I decided to take a leap into self-managing and was able to rent the property very quickly at $1750 (without that stinking 10%).

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

Ryan Blackstone https://www.biggerpockets.com/users/ryanb199#0 was by far the biggest asset I had. He graciously communicated with me through BiggerPockets, sent me emails, comps, and local references for contractors and service people.

@Beth Johnson, thank you for taking the time to respond. This is a great starting point. I'm curious why this industry is poorly established, seems like a great opportunity to explore!

Reposting in another category since my original post didn't get much attention

I'm looking to offer seller financing on several buildable lots but don't want to be responsible for the monthly payments and tracking the balance. Does anyone have experience or recommendations for loan servicing companies to handle this process for me? I understand there will be a fee but I think it's worth it.

I'm looking to offer seller financing on several buildable lots but don't want to be responsible for the monthly payments and tracking the balance. Does anyone have experience or recommendations for loan servicing companies to handle this process for me? I understand there will be a fee but I think it's worth it.

@Ash Patel who do you use for lending?

@Bill Horton - I haven’t purchased it yet. Strapped for cash since I just bought a residential unit.

I walked the property since my original post and there is some deferred maintenance cost (approx $60K) potentially. Needs new roof, HVAC work and termites. Current owner is haphazardly working the termite issue.

I may be looking into hard money to acquire it. My bank is a little hesitant to loan more than 75% LTC on this property with the needed repairs.

@Chris Cambridge thanks for the direction!

@Steve Vaughan - Thanks for the response! Just to ensure I'm grasping this correctly...

If I purchase the property for $499K - $72,140 at .144 cap putting 25% down then:

Refinance the property at .08 cap = ~$900k w 75% LTV = $675k amortized over 360mo at 6% = $4050/mo PI payments

$72,140/12 = $6012/mo NOI

$6012 (monthly NOI) / $4050 (monthly PI debt) = DSCR of 1.48

I guess it would be the same over a year of 72140/48600 = 1.48 DSCR

Regarding the market analysis - I'll reach out to my lender and see what they can do for me! Thanks!

This is a serious look into my first commercial property.

I'm running numbers for a commercial medical space for sale at .144 cap rate due to a full service lease being renewed annually. NOI is projected $72,140, asking price $499K.

Building is rented by a federal government organization since 2009.

How do I estimate the cap rate a lender would cash out this property at?

I would love to think that .10 cap would be the conservative answer but I don't know if that's true. A cap of .10 would give me pretty close to no money in the deal at a 75% LTV.

Also - If someone wants to cough up enough cash to buy it out right, I'd entertain a partnership conversation. 

I can argue both sides. Should someone "running the numbers" of a multifamily property include management fees when determining NOI to determine cap rate?

Professional management is optional and has a fixed cost/percentage.

Self management is "free" - it has a cost but less tangible than hired management.

If someone is trying to do multifamily BRRRR math do you include management cost in your NOI?