All Forum Posts by: Jairus King

Good afternoon BP family!

I apologize in advance if this question seems rather “foolish”. I typically operate within the residential space and have a few rentals. I have turned down a few apartment scenarios because I am not educated in the commercial arena at the time. Thus, I have been looking into the apartment complex space and continue to educate myself in the event that opportunities continue to be brought to me.

Sooo In digging into a number of courses my concern is this with the larger 10+ apartments and high numbers 1 million and up. The steps initially appear pretty doable

1. Find the property
2. Run the numbers
3. Get the financing
4. Maintain the asset
5. Refi once stable

My concern is in the exit strategy. These commercial loans are typically short term and sometimes balloon payments. The closing cost and associated fees often add up in these transactions.

In the examples that I saw … Essentially there may be a mix of private/creative/bank money to get the asset initially. Which is basically valued on current and future growth.

Once you stabilize and raise the rents it would be the hope that the property would appraise for more and the owner would refi and get back significant returns. The trick….

If the owner performs that commercial refi…….. When the 5 years come up the property has been tapped so the next buyer certainly isn’t going to pay a premium to take the property on? I am currently seeing quite a few overpriced properties.

Does this make sense to all?

Soo in the class I am reviewing they are teaching us to undercut deals brought by brokers, but once we refi a property and pay off our partners wouldn’t we simply become the very targets that we were after 5 years ago?

We essentially are stuck with an overpriced, though performing property that we would need to keep refinancing every 5 years until we can get it off our plate. Am I looking at this correctly?

Good morning BP Family,

I have been blessed enough to have a property paid off and a few others with considerable equity. However I am looking at the net worth on paper and would much rather see that in my pocket or being exercised to get me to the next level. I have been considering the options and speaking with lenders and was hoping to hear from seasoned folks with 10+ houses that could provide insight on how to get to the next level.  

MY THOUGHTS

I was looking into cross collateral funding. My local bank said no thank you, but  private lender said possible. Essentially how this would work is that they would take the paid off property and finance a new property and then provide a few chips for me at the end of closing. However this is short term funding and I would have to refi- in 12 months. I would also have one loan to pay but two properties in debt. My thought was why would this situation be better than a straight refi to the paid off property and utilize those funds to go after another property? Can anyone share why this strategy may be useful? 

Pledge Equity- This is the sandwich that I was kinda after, but of course have not found yet. The ability purchase a property and pledge the equity in my paid off asset as down payment should I default. Essentially not having to come out of pocket on a new acquisition. Is there anyone out here that plays this game or am I unicorn thinking about possibilities?

I also looked into other means of HELOC and saw that many CC companies are now offering lines. I'm not sure this benefits me as there will need to be a means to pay back that money.... Perhaps after the new acquisition you refi to get the down payment back?

Anyhow was just looking for thoughts on these strategies and how some have continued to get into the 20+ club. Thank you for the time and any input that could add to my thought process.

Good morning Guys-

I am seasoned and was looking for feedback on if I was/am perhaps looking at this wrong. Lately I have seen an influx of business credit for real estate videos popping up on youtube. These videos are claiming 50K-200K unsecured in business credit cards and it doesn't report to your personal credit. I am kinda shocked and calling BS on these videos.

My experience was that in my early on career I amassed a number of business credit cards, secured a property with it and then couldn't refi the property because my score dropped due to maxing out these cards. Yes It got me started, but what a horrible way to enter the game. Anyways I imagine these cards could benefit flips or double closings.. Anything short-term, but buy and holds Yikes. Has anyone perfected a process in perhaps making this work? Am I not seeing something here?

Right!! Okay makes sense now. I was thinking about the lending on terms if the park already has the homes, but I was like man.... thats a lot of "contract for deeds" as I see that as the easiest way to get it done and if there is a default its just a breach of contract and we can move on faster. 

Good afternoon all,

    Had a quick question! In analyzing the mobile park world I continue to hear that it is best to own the land and let the tenants buy the mobile home. I do see the benefits as this takes maintenance out of our hands. However I was also looking at the drawbacks and was hoping to have anyone weigh in that is familiar with running a mobile home park.

Question?

1. If you own the land and say charge for homes that once belonged to the park..... Wouldn't that be a fixed cash flow?

Meaning that if the lot rent is.... 300 for your tenants.... It will never be able to grow unless they somehow leave or you add more lots?

I only say that because that income is good for now... but will it still be great in ten-twenty years??

Hey Gary! I need more specifics.... VA is a spread out state and there are places willing and unwilling to do the deal were-ever you go. It may be worthwhile to check out private attorneys as a handful of them have handled transactions for me in the past as well.

Good morning all,

I have a few properties to date and continue to acquire at a steady pace, although COVID impacted me. Had a question for savvy investors. I have heard of other investors basically starting with zero properties and then landing a deal with multi-properties from another investor. Soooo Here is were I am kinda "feeling" my way around. I do often get brought multi-deals from guys and gals that are retiring and want to cash-out. Some of these deals are wayyyy big, but I figure if you get the money - leverage the deal. So the question is..... Are there any true success stories on who specializes in these types of deals?

I have started engaging my typical local bank that has handled a few of my transactions and then kinda moved to my private money guys. Am I going about this in the right way or is it kinda a pipe dream to entertain these large portfolio transactions? We are sometimes talking 15-60 properties at a time.  500-1 mil in aquisitions. 

Yes- I have a key... No idea if they tried to change the locks without my knowledge, but I am aiming for early next week. The tenant has since provided their "attorneys" number and states that they are going to move soon. So I did reach out to the attorney to get some cooperation, but no word back yet. 

Good afternoon all,

I have a tenant that is disgruntled.... Likely because the covid rent moratorium is ending in Virginia. Seeing how the tenant hasn't paid in forever we would like to lower the rate on the property. I requested to do a walkthrough for the inspection and the tenant is refusing to provide access.... I read that with reasonable notice we could be escorted by police officers onto the property. That would be unfortunate.... Any other ideas?

Okay-

So three months into this pandemic and my typical funding sources are holding tight. I tried private money/broker/bank. The bank was working on my application and then stalled once COVID hit. They changed the requirements multiple times making it tougher to qualify. The broker flat out said that the industry was scared and not lending. The private money could deal, but the offer was horrible. 60% ARV ontop of the finance charges.... It just didn't make sense to go through with it. So Im reaching out to see if there are any lenders still lending on investment properties. I wanted to complete a refi, but if not I can certainly hold.