All Forum Posts by: Jim Pellerin

@Tyler J. The Cap Rate is NOI / Purchase Pirce. So in your spreadsheets, it would be J13/D14. And because you bought it with all cash, your ROI, Cap Rate and CoC are all the same, 24%. You should include an IRR calculation,

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Quote from @Bernadette Cap:

Thank You, we have to do this the right way the first time.it

Exactly. So find a good mortgage broker that also has access to private lenders.

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Hammond, Indiana

@Bernadette CapInteresting dilemma. The HELOC will increase your liability and therefore affect your investment loan application. The investment loan application will impact the HELOC application. I'm sure a good mortgage broker would be able to help you out.

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Hammond, Indiana

@Ryan C.

It may work but here are my thoughts.

1. Sounds like a complicated business model where each business/property is dependent on the other. It could implode at any time.

2. You may be overleveraged so make sure that each property can cover all their associated costs.

3. Your lender may catch on and value your property at market rents and not your actual rents.

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Quote from @Ethan Hanes:

Quote from @Jim Pellerin:

Maybe try looking for wholesale deals in other markets. You already have the skills. With that amount of effort you should be able to do 1 or 2 deals a month.

Jim,

All due respect, but everyone works at a different pace. Saying “you should be able to do 1 or 2 deals a month” doesn’t encourage or help anyone. It just discourages those who aren’t making 1 or 2 deals a month. Ask more questions.

I'm basing my estimate on his effort. If he's making 6 hours of calls a day that a pretty good pace.

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Quote from @Koshu Takatsuji:

Hi everybody,

I keep reading about it being possible to find 10% CoC in midwest, but i'd love if someone would guide me through their calcs so i could learn how they're assuming factors - and also the type of neighborhood it is.

I'd also love to run my calcs to see if the way I'm thinking about it is correct as well. I would show a example of a calc, but i also want to consider factors like neighborhood, etc.

@Koshu Takatsuji

There are a lot of private equity deals offering LPs 10% to 25% and more. And they have a good track record to prove it.

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Quote from @Jesse Hopcus:

Hello, I recently had a friend that got audited for writing off the depreciation on his subject 2 deals. Is this to be expected, kind of don't ever want to get audited? Has anyone else come across this situation, possibly with other creative financing deals?

@Jesse Hopcus I don't think the fact that it's a subject 2 deal would instigate the audit. There was probably something else. As far as the loan, that's between the borrower (previous owner) and the bank. Depreciation is associated with the property, not the loan. The last time I got audited I ended up getting a refund. I forgot to declare some things. If you are doing everything right the audit shouldn't be bad, except maybe for the costs to pay your bookkeeper/accountant to assist you.

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Quote from @Brandon Craig:

Quote from @Will Barnard:

Quote from @John Teachout:

So unless the property management is going to be done by the deal sponsors, they're not delineating what amount is going to which... The more details that come out about the structure of this syndication the hokier it sounds to me. You seem to be committed to moving forward with it so all I can suggest is to bring this thread back to life in a few years and let everyone know what happened.

I agree with this. 10% fee, even considering PM fees in it appears to be high and neither is specified as to how much goes to each. If they are doing a 2% and 8%, then the sponsor management fee is double the norm. There have been quite a number of red flags and warnings in this thread and many of your responses tend to be, "but what about this and this is why that is" leading me to believe you have already made up your mind that moving forward is a good idea so I wont try and change your mind but again, warn you that some things in this syndication are outside the norm and the promised rates of return (STR's in the package included) are abnormally high leading me to believe that the investors will have a much higher chance of disappointment than satisfaction. A syndication should be well focused and this particular offering is all over the board. If you like the idea of investing in a syndication with STR's, then find one that focuses on that and has a good track record. If you like the apartment syndication process, then go with that. Combining so many strategies into one syndication offering is rarely a great idea.

Thanks for your response.

I think assumptions are easy to make due to this being all text, but my mind is absolutely not made up which is why I am posting.

i raised the concerns with my sponsors around the high IRR and fees and other points you all made and she countered with the air bnb component being the reason. I simply came back to you all with the rebuttal.

And what's their track record again? How many deals have they done to substantiate such a return?

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Quote from @TayQuan Hobbs:

wassup friends i’m TayQuan and i’m happy to be apart of the community. i’m just looking for opportunities on property’s and looking for more guidance on how start generating positive cash flow.

If you need cash flow, the best thing to start doing is wholesaling

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Raleigh, North Carolina

Maybe try looking for wholesale deals in other markets. You already have the skills. With that amount of effort you should be able to do 1 or 2 deals a month.

1 Vote

All Forum Posts by: Jim Pellerin

Jim Pellerin has started 8 posts and replied 870 times.

Post: I made a rental spreadsheet but I think my cap rate is wrong

Post: New invester sfh and mfh

Post: New invester sfh and mfh

Post: Renting to your own LLC

Post: HONEST opinion on 20 y/o Real Estate job 🫣😬

Post: Cash on Cash 10% - hoping to see how this is achievable

Post: Audited for Subject 2 or creative financing deals?

Post: First Syndication Deal

Post: Uprising Beginner Investor

Post: HONEST opinion on 20 y/o Real Estate job 🫣😬