All Forum Posts by: Zoran M.

I do have the reserves, yes.

Hi all. I've never been involved in this sort of transaction and wanted to get the communities input. I am negotiating the purchase of a portfolio of 3 SFR Units in Cleveland, ohio. The seller has agreed to an upfront cash payment of 1/3 of the portfolio value with the balance being seller financed. Worth noting, the 1/3 down payment is being provided to me by a private lender, which I will need to repay within 6-9 months. A few questions: 1. What terms should I attempt to secure under seller financing? I was thinking 5 year maturity, 30 year amortization at 4%. Ballon payment at maturity. What protections should I include, if any? 2. What is my best avenue to repay both my private lender and ultimately the seller? 3 separate mortgages from a portfolio lender at 75% LTV? I am targeting to buy the properties at 70% of appraised value. Much appreciated!

@Wendell De Guzman - Thanks for sharing your spreadsheet. I tend to build ones that are overly complex. Love the simplicity!

@Engelo Rumora Ja ne pijem nasu kafu! Maybe an espresso or Pivo.

Javite mi kad dodjs u Clevelandu!

Hi all,

I wanted to get the communities take on how rehab spend has trended over the years in your markets. In CLE, I've noticed a trend where in C+ to B- markets, landlords are doing cosmetic rehab beyond just paint & carpet. I often see "large" investors (>4 properties) putting in new cabinets, granite, new tile floor in the kitchen and updating bathrooms with either new tub surrounds or wall tile. In the same neighborhoods, other investors are simply buying the property, replacing carpet / paint and renting out the unit.

There is a material delta in the rental rates between the two strategies. A fully rehabbed property in one particular suburb can generate $1,250/mo, whereas the minimum-rehabbed property may only trade at $1,050/mo. These homes are blocks away from one another...

What are you guys seeing in your markets?

@Account Closed - I've seen it done both ways. Sometimes you will see turnkey companies only use the downpayment amount in calculating CoC return.

I include everything ... even down to the $200 on inspections.

Dobrodosli, @Ronald Cvetkovic

Dobrodosli Roni! It’s nice to see a fellow Croatian on BiggerPockets.

1.A good property manager / turnkey provider can guide you through the process. A property manager will help you find a property, possibly renovate if necessary, place tenants and deal with the headaches. A turnkey provider will sell you an already rehabbed home at a markup (they need to make money, too). You will likely need to buy in the name of a Limited Liability Company (LLC). To my knowledge, there are no restrictions on foreign nationals owning LLCs.

2.Definitely use an LLC.

3.If you flip a property (< 1 yr), you are subject to short term capital gains taxes. That’s a high %. If you hold for 10-20-30 years, the value of your property will have depreciated and your tax bill will likely be materially lower.

Bok

Zoran

So true...one could buy 10% of a publicly traded company without any sort of meaningful filing or large contract. Just call a broker and done. God forbid one tries to buy a property and forgets to initial the bottom of a page!

Is be interested to hear why you lumped CLE with markets like Vegas and Atlanta. We're a cash flow market with no material appreciation, outside of forced appreciation. Most PE firms are including appreciation on their models.