All Forum Posts by: Levi T.

Use only local regional banks, or use private lending/capital. If you want to find good banks to use, checkout https://www.ibanknet.com/bankm... click on the state, click on bank, and go from there, and avoid national names you know all to well. One of the best bank relationship I ever had, held 20b in deposits, and 26b in assets (displayed in thousands on that website). The next one was 3.6b deposits, with 4b in assets, and that bank had the owner and the board look at each loan request on Friday only, but they had more wiggle room that larger banks. If you want unfeathered lending terms go private, because you don't have the fed reaching in their back pocket telling them how to lend money.

There are a lot of attorneys for a lot of things. Do you want an attorney to write a syndication private memorandum, or just a general real estate attorney... Or how about landlord attorney? I would start with that, then break it down into large law firms, and small single attorney operation, depending your needs. For example if you just want an attorney that does landlord evictions.. go after small single attorneys, and tell them your putting out a request for pricing for evictions, they will normally give you a flat fee for first hearing type thing. What is your goal?

Thus why I said solve the problem for them. Not everyone is worried about the cost of owning it, maybe it was their mothers childhood home, who knows! I recently bought a townhouse for 128k, nothing wrong with it, it was worth 395k as is. Seller for whatever reason wanted to move, and I mean move now. So... we helped them make that happen.

Wayne is right.The seller is under contract to that agent, they won’t play ball without them. While legally agents have to present offers, it’s unlikely your offer will hit their doorstep without your own agent. Call the agent directly, get a feel for the property, and the sellers mood, offer the agent that you will pay their commission, maybe a flat fee that is comparable to the 650k price, if they came make the deal happen at the price point you want.. But before you go all in, check the history on sale price. I’ve never seen a seller take less than their loan debt, and only a handful take less then they paid for a property. They will take what they paid for it in 1980’s, right to the dollar, but never less. I think it’s one of those stock market psychology things where they want to exit, but not at a purchase price loss.

Write the owner a few letters, and try to find their personal phone to call them. See if they want to make a deal or not. Hopefully they will talk to you, and be interested in making a deal. Beyond that, it's about helping them solve a problem, and sometimes that problem is not what you think it is. 

It’s rather simple, if the deal is really worth more than your paying, and requires no improvements, then you just wait 12 months (season the property), and refi at at market value. If you can’t make that happen, then likely your thesis is wrong about its value. 

When the market is where it is at now, especially with rates, you refi your portfolio to hold more cash, flip some deals, and wait for the drop. When all these newbie flippers and investors vaporize, that's when you know it's time to go make some deals. Newbies love bull markets, pros love bear markets.

Cap rate on the NOI is more or less the go-to for first glance, but you need to really take a hard look at the income report, as the owner or manager may not include everything... Like insurance, or taxes, because the "owner" pays it, and not the management company, so it's missing from the income report. Rent roll inflation is common, as well as assumed loan rates by seller, or whatever they cooked up to come up with their advertised cap rate, so pay attention to the little details, and assume nothing. I personally go for cashflow as is, with value add. It's the same way you would buy a BRRRR, but scale it out per unit. It is very common for multi investors to do 30% or 60% of the unit remodels, then sell before completing the last few units. Tis creates a value add opportunity for the next buyer. I bake offers based off the cashflow and my current loan terms. As I do private non-recourse loans, I need 65% of appraisal value, plus room for the bridge loan to make improvements based into that. In your example you have a 1.8 million purchase price, plus closing cost (assume 10% add), you have 34 units, and we will say we will sink 12k into each unit, with maybe 2k of that going t external improvements. That mean's we have a 408k construction cost, and a 180k closing cost with loan org fees, etc, for a total added cost of 588k, which brings the deal to around $2,388,000 to close and improve, but you don't want to spend that type of cash, so frankly I would offer at 1.5 million as that is 65% of that, which you will likely end up somewhere between 1.5m - 1.8m. You can get into other details to create value add once you have more experience, such as getting lower insurance, or management cost, etc. It's more about gaining control of the asset. For example, maybe the owner will only take 1.8m, but you know it wont work for the bank, or you don't have the means to make that happen, so you instead offer a Master Least Option (MLO), and you use the MLO deposit to improve the property along with the cashflow, then once you get it up to the new value, you get it appraised, and exercise your option to purchase it at 1.8m or whatever.

Yes in VA. We just had one get funds on Friday.

It's hit or miss, just depends the region, but keep in mind that Zillow now makes iBuyer offers based on their own Zestimate. The more transactions they have in a region the better it gets. Frankly even a fully licensed appraiser is only so good. I have more than a decade in this business, and the range of values is worth a grain of salt. I have seen two separate appraisers go to the same property, in the same condition, and both come back almost 40% apart on the value, but when it comes to banks needing some type of proof of value, and the fact that most people only buy one or two homes in their lifetime, they just want someone to be able to tell them they are not overpaying. End of the day, if the seller thinks their shack is worth pie in the sky, then that is their opinion, and no one can convince them otherwise. Half the job is having dozens of people tell you they have a house is worth market or higher, while your trying to get it at half the value, so you can fix it up and bring it to true market value, with a little extra equity on the backend for the win. Prices are fluid, and a house is only worth what someone is willing to buy it for in the moment.