All Forum Posts by: John Lutkenhoff

@Cory Iannacone That all makes perfect sense, and agree that a good deal will attract the right people. Thanks a lot for sharing your success, we all need to hear others success stories to reignite our motivation and keep us moving in the right direction. Thanks again, and keep up the great work! 

@Cory Iannacone This is extremely motivating! I can only imagine it was a wild ride, but incredible work and determination. You made some bold moves (like the cash offer deal when there was no cash) and they paid off.

How do you go about finding your investors, or private lenders? I'm working on trying to purchase my first multifamily property, and my only hurdle is the down payment. I have analyzed hundreds of deals, and I have multiple options just waiting to be snatched but am falling shy on the down payment to lock it up. The people in my close network have their cash tied up at the moment (such as my family who also have properties) but what have you found to be the best way to expand your private lender network? I see that you mentioned hard money lenders, do they also lend for partial down payments?

Anyone else that has any input on this, please feel free to chime in. I'm completely open and am extremely interested in learning. Thanks in advance

Also, I'm west Michigan and would love to connect with anyone else that's investing in Michigan.  

@James Barry Thanks for jumping in on this, this information is priceless.

On the current deal I'm working on, I recruited my parents to partner with me. Unfortunately, they are extended at the moment with their commercial tenants asking for rent extensions given the current virus situation, a couple single family properties soon to be vacant due to tenants moving out of state, and their recent purchase and rehab of another property that they fully funded. They are older and would be dipping below a comfortable liquidity level which is totally understandable. They would be all in if it weren't for the current situation and timing. All that to say, part of my reasoning for trying to get creative and figure out how some investors are able to pull this process off. 

Either way, I'm glad you mentioned that because that's valuable to know going forward. With these different lenders that you mention, does their criteria differ quite a bit from lender to lender? Are these considered hard money lenders? The biggest thing I'm struggling with is such a large down payment, I have no issue finding a cash flowing deal or even the management side of it. The 25% down is my biggest hurdle.  

@Eric Johnson Very interesting, that all makes perfect sense. 

You're correct, I'm finding out that in the investing world $50k is not very much at all. It seems like a lot to someone who is trying to save that on their own from their day job to improve their position, but in all reality, you can make a great ROI on that money in real estate if placed correctly. Thanks for all the insight Eric

 @Eric Johnson I definitely am, thank you for the information.  

You being a lender Eric, might be able to answer this. I hear of multiple people doing deals with little or no money of their own in the deal. How is this possible? Unless you know multiple people with cash laying around, it's pretty difficult to come up with $80-$100K for a down payment. I've been working on a deal for a couple of weeks right now, and trying all kinds of work arounds, but without that 30% in a secured form, there pretty much is no deal. How are investors purchasing properties with hardly any of their own money in it? On top of that, how are they purchasing the second and third properties shortly after that, again with little to none of their own money in it? Have they just established great relationships with wealthy people that have the same goals?

Thanks so much for the reply and honesty Benden Mitchum, it's extremely helpful to hear. Since doing some networking, I've made some really good contacts including somewhat of a mentor. I've decided to get my feet wet on a smaller scale and tackle a more achievable goal of picking up a quadplex, I will then work up from there. The lack of knowledge is definitely there for me, but I'm amazed at how much can be learned each day with the presence of interest and drive. We all have to start somewhere, and it usually starts with large visions until we grasp the full scope and what's involved. Thanks again for your feedback, best of luck to you in your journey. Hope to speak with you again soon. 

I am very new to real estate on my own, but I have been around the residential rental game my whole life since my parents own 19 properties, one of which is commercial. First question is, would apartment buildings be considered commercial or residential to a lender?

My main question is, I've found a great deal on an apartment building with a great cap rate, below market rental rates, 100% occupancy, and an occupant waiting list. Is this worth even going to my bank with, or would it be a wast of time since it's such a large amount of money and my net worth is around $100K? I have so many questions like, how much would I typically have to put down on a deal like this? Being new to the game would I even have a shot at making a deal like this go through? Should I start smaller and work up? Would the bank do it but I would have to come up with 50%, and in that case do I raise that 50% from hard money lenders/private lenders?

I'm very confident that I could handle the outcome if I got the deal, but I'm having trouble thinking that anyone would invest with me being newer and given it's on the larger side of most deals since the acquisition price is around $1.9M.

Any input on this would be much appreciated, thank you in advance.