All Forum Posts by: Jon Reed

1st thing... Congrats on doing some great leg work! You are starting out much smarter than myself a year and half ago Haha!

Next up... I would agree to sell the Colorado property and a 1031 exchange into the 3 properties in NY. As far as the refi-loan on those three properties, I prefer to use commercial loans since they don't impact my personal credit score and they still pay out 80% of the market value of the property. 

The only issue I can see is that the properties you are wanting to buy are in your mom's and step dad's name which means your step dad will also need to agree to the sale of the properties. If he is oblivious to this plan I would be concerned that he becomes a road block to the sale. (this may be a non-issue but depends on your family dynamic)

Lastly, I also am a fan of not getting your RE license. Find a good agent that will help you be a successful real estate investor. 

Good luck! 

Is your total budget $12K for property or just $12k for the kitchen? 

IMO I do not believe it is going to be worth trying to save the cabinets if you are adding a dishwasher, range, and microwave vent into them. Also, depending on how the counter top is attached you may end up destroying the bases when you remove it (some people like to screw and nail counter tops down.... it is a pain). 

If you have $12k just for the kitchen then you should be able to find some new middle grade cabinets and lay out the kitchen in a way where the fridge, range, dishwasher, and microwave all fit in and look like they were meant to be there. 

Ask around to some other banks in your area and find out. Even if you are only able to tap into 60% of the properties value then you could get a LOC for $112K and close out the LOC of 65K.

However, in our area there are some local banks that will go up to 80%. 

A multifamily property for 20K seems like it would just be the value of the land and the house itself is just a shell. 

I would take a hard look at what you think needs to be done to a 20K multifamily unit to get it to gross $1,450. Maybe find a contractor in your area and have them walk through it with you and give you a bid of what it would take to renovate. They may be able to give you a better idea of what the true cost of making a 20K multifamily property habitable. 

Hey @Jeff S.! Thanks for that insight! I didn't know a lot of the information you lined up. I was wondering if there is a threshold on the amount lent that puts a person into the bucket of having to deal with federal regulations? Does the relation between the hard money lender and the lendee make a difference (kind of like the different types of syndication)? There must be some guidelines that differentiates between a family/friend hard money loan and an institutionalized hard money lender.

Ohh you haven't purchased the property yet... in that case run away! Hahaha (but for real... that sounds like a huge project and would need some crazy high returns to make it worth it)

Depends on which one offers the better rate and if you are in a buy and hold position or a short term investment.

If you bundle them all together into a single note then make sure you have an option in the note to sell off individual properties from the bundle and roll a portion of the proceeds of the sale to pay of an equivalent portion of the note's principal. Otherwise you may be stuck having to sell all the units at once or refi the entire bundle if you need to just sell off a portion of the assets. 

There are way too many outstanding questions for anyone to give you advice on that deal. You need to ask for a rent roll from the property and a full stack of historic expenses and see if the numbers make sense. 

It could also look amazing in paper but if all the tenants are late on rent and need to be evicted then that may become a horrible deal in real life.

You probably should have found investors before you are got everything under contract and loaded to go. 

How to find investors? 

Answer: Network!

Easy, inspect your properties regularly. 

An air filter is $4 each... and need to be changed every 3 months. I use that an excuse to go inside every single property every three months and the tenant likes knowing that they get a fresh air filter.

During those filter swaps you can find out if they are messy, cooking meth, growing pot, or damaging the property and get it taken care of before it turns into a multi thousand dollar repair.