All Forum Posts by: Jim Farrell

I figured, @Paul S. .

I'm an investor new to the note side, and keep hearing "Dodd Frank".  I understand that this relates to federal law passed in the last few years under the guise of "helping the consumer".

It may be way too complex to address in a collection of posts here, but what is the upshot of Dodd Frank as it relates to NPN or performing note investing? What does a note investor need to be versed in with Dodd Frank?

Thanks in advance!

Sean, is the note currently owned by a private owner or hedge fund?  Do you have a sense of whether there is competition for the acquisition of the note?  

Depending on your other condtions--and how close you are to asking price--I'd hold firm on getting permission to run a current credit report.  However, if the seller is not willing to play ball, look VERY carefully at payment history.

@Dion DePaoli , I'm curious to what you attribute the upward pressure on price? At what price tiers? Is note investing becoming "trendy"?

Thanks in advance. 

Hello Tai, and welcome to BP. Real estate development is not for the faint of heart, so after reading your post, it begs the following questions (and I hope you don't take offense): given you're new to development, why would YOU want to take this on, and why would your friend want you to lead such a project?

Direct questions, I know, but development is fraught with risk, which is why returns are typically highest on development projects (versus flips, investments in existing property, etc.). You should think twice about being asked to put your time, money and personal signature (banks will require personal guarantees on the financing, from you and your spouse, if applicable) on a project where it sounds like you'd literally be learning on the job.

That said, I'll answer your question by saying development fees vary, but are usually in the 3-5% range. This would be a percentage of the "hard costs".

Good luck!

Congrats, @Robert Blake . To go from just starting with REI in early 2013 to an 80-unit first purchase is an impressive accomplishment. That's something not a lot of people would have the gumption to tackle, since 80 units is a healthy-sized property to take on.

It'd be instructive for all of us to hear more details on how you found the deal, how you structured your partnership and any other details you'd like to share, if you're so inclined.

Best of luck in the future!

Hello @Chris Gylseth , it;d be instructive to know how you found the deal.

Thanks!

Jim

Thanks, @John Chapman , for your response. I should have clarified that I was referring to the instance in which the investor serves as his/her own management company, which seemed to be the theme mentioned above.

We'll have to agree to disagree on your assessment that small multis present an "increased" management headache.

I must admit I don't understand the objection posted by @John Chapman as to investing in small multis. To me, management is the primary difference as a buy-and-hold investor in terms of how it performs. And if I own 4 SF homes in different parts of town--versus 4 units all in one place--there goes the probability of management headaches increasing. Leaky faucet, HVAC doesn't work, on and on...

I also don't follow the control issue mentioned by John. Whether you have a rogue tenant on the other side of a wall or the next home over, it doesn't make a difference. There's only so much you can control, and how neighbor investors rent their units isn;t one of them.

I'm all for diversification--and I do own 2 SFH in Memphis--but going forward I'll be buying small multis all day long over SFH.

I'm guessing you've already run a property records search online, since you've identified that the owner lives in CA, @Justin Hicks ? If so, it's likely that title is held in a corporate entity, either an LLC or Corporation. Then I'd suggest doing a Google search of something like "Corporate entity TN", which should take you to the TN site that will allow you to do a search of the ownership entity. This should give you the name and address of the Registered Agent, at a minimum. You can then try and contact that person and express your interest in the property.

It's not easy getting to the decision-maker, i.e. the Managing Member or General Partner, but if you do, I'd suggest you simply introduce yourself on the first call, let them know you'd be interested in purchasing the property and try and learn as much as you can about the owner. How long have they owned it, how would they describe their experience, etc. Don't talk numbers on the first call, just build rapport. There's always time down the road to talk turkey on the numbers. Trying to do that on the 1st call--especially since you think value is "nowhere near" the $2.8 million they paid--wouldn't set the right tone.