All Forum Posts by: Tyler Weaver

I would verify that it actually has slate.

The slate can often be removed by a company specializing in slate for free, or they will pay for the material if it is removed properly. 

Congrats! Would you mind sharing what your typical per-unit renovations look like? Did you complete all 10 yet or did you get the refi mid progress?

What is the structure of the private money for the down payment? Are they then equity partners, second position on the property, or how was this arraigned?

Honestly there should be opportunities coming available now and towards the next 24-36 months. Even though the markets are not really down currently, there are still people listing their properties with the intent of getting more liquid or to rebalance their investments. 

With a SFR, the snow is typically the renter's responsibility to clear. Though generally speaking places that snow are experiencing a lower growth rate than places without snow.

Replacement cost vs current value is another concern.  In Cincinnati the value of most inventory is much lower than replacement cost so there is less risk of massive overbuilding which is the biggest risk for long term liquidity. 

You are asking why everyone is afraid of new construction as competition or why everyone is afraid to do new construction?  New construction is likely the biggest risk factor in multifamily where a softening of the economy mixed with new units hitting the market can temporarily create a race to the bottom on pricing.  In highly leveraged deals this could destroy the liquidity of the deal. 

The labor pool is probably more dynamic than you estimate.  *IF* you decided to build 50,000 units in short order it would be accompanied with a story of why the market is undervalued and you would have to be willing to pay a premium to get those units built.  

That is a nice looking property! For the financing, was the rest raised with a commercial loan?

Swift Construction https://www.facebook.com/pages/category/Contractor/Swift-Construction-148334265863080/

The two options I see are ditching the cabinets or keeping it 100% as it is. As a rental, you probably do not have to come back in with quite as many cabinets either. Possibly just do the back wall, and an island or something similar to that.

Really it is purely psychological for the seller.  But it can make a difference.  They still see the full price offer. It is easier for them to justify full price with a specific budget to fix deferred maintenance. 

It creates an extra item that can be negotiated as a benefit for the buyer.

I go for 30 or 25 as well.  If you calculate your Return on Equity, paying off more is fairly counter productive. Also the safety of having more equity does not make a whole lot of sense to me.  Say you run into a cash flow problem and the market is not doing well. You may not be able to pull the equity out due to valuations or illiquidity in the market. You may also have trouble pulling out the capital at times of need because your financials will look distressed at that point. It is best to keep a measure of cash, refinance out the capital so you have liquidity before you need it.  Of course this is a balancing act with having to pay interest on this capital.