All Forum Posts by: John Stewart

Investment Info:

Single-family residence fix & flip investment in Chattanooga.

Purchase price: $90,000
Cash invested: $1,700
Sale price: $97,000

Wholetail!

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

We are not all that interested in this strategy, but it came up and we jumped at the opportunity.

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

Handwritten letter

How did you finance this deal?

Private money!

How did you add value to the deal?

We did not!

What was the outcome?

walked with a decent amount of money, could have done better, but not with only 2 months and no work done.

Lessons learned? Challenges?

I sold it to a friend and because of that was not a vigilant with my negotiations as I should have been. The deal was losing money because the rent was not covering the interest I was paying to an investor. Because of that, I needed to sell it quickly. I was talked below my bottom dollar because I knew that I was not going to be able to spend much more time finding a new buyer.

The deal worked out in our favor, but I can see how it may have been a big headache if it had gone differently.

Originally posted by @George Yu:

@John Stewart no we went with a local bank in the city and got it. Wasn't that hard for us we had the balance sheet and relationship. We have never raised capital before. We would like to at some pointt but would like see how far we can get with just our own blancesheet. so far after this last refi we pulled out our initial 20% equity and more

Thank you for the response!  That is amazing!  Always looking for that infinite return, bravo!

You have actually inspired me to keep going after development.  Thank you.

Way to go George Yu! That is inspiring!

I am totally with you on the having a hard time justifying a 6 cap apartment...it’s nuts out there!

I have been mulling over the idea of building for a few months now, I have an engineer on my team and we believe we can build at half the cost per square foot of conventional builds. I feel like this gave me the inspiration to go for it!

My question is what did you do to get the construction loan? Did you raise the capital? You mentioned Cardone, who famously raises others capital. I am nearing completion of my first multifamily deal using investor capital, did you just scale up on this concept?

Thanks again for the post!

Originally posted by @Shaka E.:

Hopefully your underwriting was conservative and you were not to aggressive on your projections. Markets go through cycles so if you have a projected return you trying to achieve on exit you might just have to hold the property a few years extra.  

 Thank you for the reply! I have looked at different scenarios and tried to stay conservative.  Sales have slowed but are still increasing by whole numbers, just not double digits any more. 

Originally posted by @Ned Carey:

@John Stewart yes a recession is coming. But nobody knows when. I would expect a general economic recession to come before a real estate specific downturn.  I am being more conservative now.

Thanks for the reply! yes, that's true. I have been checking the sales reports of Real Estate in my market regularly, so far it's flattening a bit but not inverting. I wanted to see what others noticed in their markets? I am still very new to REI, and trying to be overly conservative, which won't change no matter how the market is doing.

The yield curve on the short/long term bond market has now inverted. I really want some thoughts about the outlook for our market and other financial markets. I’m not a doom and gloom kind of guy, I’m actually neck deep in a large acquisition now and have high hopes of a very solid exit. But my market has not experienced significant slowing compared to other MSA’s. That being said, the yield of the bond market has been a historically accurate marker of coming recession level growth on a national level. What do you think?

If I find a house that is owned by fannie mae, how would I go about acquiring it? It's a big organization to navigate...

I also have the same question.  I am not sure how to get a list of names.  I have asked the clerk at the court and she has said I need names in order for her to look up the records.  Can I just ask her for a list of names? I guess I can go try, but if anyone has any other information I would love to hear it.

What's up BP,

My first wholesale deal is in the process of closing right now.  I didn't do amazingly, but it's something; and I created a win-win-win scenario, which is my favorite thing about wholesaling.

I really want to start a discussion about the logistics of how you guys (pro's) close.  I did probably the least recomendable closing for a newbie, it is a true assignment of contract without a double close.  This means that everyone, buyer and seller are painfully aware of how much I made during the process and exactly what I was doing.  I actually had to state what my fee was on the amendment to the contract for purchase and they had to sign it!  

I jumped in to this without all the knowledge and it worked out for me, like I said everyone was happy, a true win-win-win, but I know I won't get this lucky always so I would like to know some different strategies to make sure that wholesales go smoothly.

I live in a "wet financing" state, so in order to double close, I have to bring my own money or hard money to the table.  I guess in some states you can close with the money from the B-C transaction to close the A-B transaction, at least that is the way it used to be.  I am starting my career with very little money and it's what has attracted me to wholesaling.  I am a hell of a hustler and I could sell a snowcone to a swede, so this side of the business is going to help me get started, but I need some pro tips about how to close.

What do you use? Do you buy outright? Do you find private lenders for the transactional funding? Do you just have a stellar system to assign the contract, transparency be damned?

I was planning on going, is it still going to be at the honest pint?  That's what it says but @Kelly Rastatter mentioned it moved this month.

Thanks