All Forum Posts by: Kevin Dickson

Has anyone used or know about Howard Hanna Property Management?

Hey everyone! I am looking for a property manager for a two family home that I am closing on right now in 44109. If anyone has a great property manager I'd love your recommendation.

Hey BP Community!

I am gearing up to purchase my first rental property and I have a question regarding the best way to setup my business.

I am partnering with two college buddies of mine (one lives in Seattle, the other is temporarily living in North Dakota working for a big oil and gas company). I live in Portland and in trying to just take action and move fast, I had a member managed LLC created in Oregon and when I went to Chase Bank to open a small business checking account, they said that all of the members need to be present at the same branch if it is a member managed LLC. They suggested that I file an amendment to the articles to make myself a managing member of the LLC, and even in that scenario, the other two would have to go to their local Chase bank and fill out a form letting the branch here in Portland know that they are members that live out of state. This seems pretty cumbersome and have heard that others didn't have to do this.

I also wanted to know if you all put each individual property under its own LLC?

Long story less long, how is your real estate business set up? (ESPECIALLY if you have partners - not just using partnerships for deals, but actual business partners)

@Nicole A. Appreciate the response. So I was confused on the refinance part. They give you 75%-85% not the other way around. So technically, in this scenario where I am only looking to borrow $300K of private money, I would be able to pull out $450K to pay back the $300K I borrowed. Thanks!

The situation with me is that I have about $150K that I have saved up, but this property that I REALLY like is listed around $320K and isn't financeable. The listing says they are only accepting cash offers and I think I have some people I know that would probably let me borrow the money. So hypothetically speaking, I want to negotiate the seller down to $300K cash for the property and then use a construction loan to renovate the property. Once the property is completely renovated, I want to be able to do a cashout refinance and pay the $300K back to my friend(s).

Hey Guys,

There is a deal on the market for a little over $300K on an abandoned property that I am EXTREMELY interested in and the seller only wants cash. I am pretty confident and I can ask my immediate circle for a loan to acquire the property. I have already been in talks with a lender on a construction loan, but my question is: How do you pull that cash back out to pay back the $300K private money?

Let's say I get it for $300K, I put $200K in it appraises for $600K. When I refinance into a traditional 30 year fixed, the bank will only loan 75% or 80% LTV ($120K or $150K).

Long story less long, if you all were to find a $300K deal that you loved, how would you go about paying back the private money you received to acquire the property?

 The observation is 100% relevant. My fiancée and I are both upper class and both drive 10+ year old cars but we aren't unkempt and don't uber to real estate showings. We also wouldn't be pulling weeds in 100+ degree weather.

This is a 49 unit townhome community around East Point. I am going to get on a call with the wholesaler today so I can get more ironclad details and see if this is worth it. I will be sending you a message so be on the lookout! Thanks for the lengthy response. It was EXTREMELY helpful.

Hey Guys!

I came across a wholeseller that had 5 units (4 - 3/2s & 1 - 2/1) in a townhouse community in South Atlanta for $150,000 total. He said that each unit needs about $30-40K of rehab. I did some research on Craigslist/Rentometer to see what market rates are for 1500 sq/ft 3/2s and I $850 on Rentometer and about $970 on craigslist.

If I assume that I can get a loan for $262,500 ($150K asking + $200K rehab - $87.5K down payment), the monthly payments would be $1,975 and the gross rents (using a conservative figure of $750) would be $3,750. That would be $1,775 net. Granted I haven't taken into account cap ex, etc but if we are rehabbing it you aren't REALLY needing to use a high number in cap ex/maint because I assume an investor would be putting in new water heaters and HVAC with warranties.

ANYWAYS lol. The deal looks great but in speaking with the wholesaler, he told me that the entire property is 49 units and the seller wants to divest of the whole thing so I kindly asked how if I could hypothetically get all 49 units for $1M and he said that could probably get done.

So I have been really thinking about it and if I had 49 units and I estimated $25k per unit to fix up (another assumption I am making is that we could get pretty good discounts on materials and overall labor since the scope of work would be SIGNIFICANTLY more than just 5 units).

$1,000,000 acquisition + $1,225,000 to rehab 49 units = $2,225,000

$556,250 would be the down payment leaving the loan balance to be: $1,668,750

Monthly payments on that loan would  be about $14,000

Monthly gross rents (at 85% occupancy and $750 per unit) would be $30,750

What I want to know from you all is:

Using these rough numbers, does this sound like a good deal?

Have any of you purchased an entire townhouse community? If so, what are the advantages?

What questions should I ask the wholesaler?

What other costs (besides property management) should I REALLY take into consideration?

If the numbers look good to you and you have experience, would you be willing to partner with me for a larger piece of the pie? (60/40)