All Forum Posts by: Nick Burkhardt

Hi all,

I own a single-fam worth $450K (owe $300K @ 3.5%) and a triplex worth $775K (still owe $318K @ 3.25%) in Scarborough ME. I am looking for some creative ideas or combination of loan types to put me in a position to buy land (maybe owner finance?), subdivide into 3 lots, build 2 duplexes and a single-fam for myself. Willing to sell, refi or HELOC my current Single-fam, but am not willing to sell my triplex, only access the equity. My wife currently stays home with our 3 children and I work a mid-level corporate job ($76K salary), so my DTI ratio is high.

I have identified 30 properties in my area that are either vacant land or are occupied but make some sense to slice off 7-12 acres for this move. The idea is to understand how to make the financing work on my end and come up with some budget then start approaching land owners with a set plan/offer to see if any of them are willing to sell.

Need some creative ideas from some experts to help me understand how I could make something like this happen. Thanks so much!

Hello, I own a 3-unit and a single family just outside of Portland ME. In my area, there is a lot of land that sits vacant. I scourer the public records finding large plots of land that an owner might sell off 5-15 acres to me off-market. I have a few plots on my list, one of which is owned by a revocable trust. I have no experience with this and wonder if its even possible to purchase from a trust like this?

Looking to have someone give me some advice on; 1. cold-offering on someone's property | 2. buying from a revocable trust

Thanks so much!

-Nick

Thanks so much gentlemen! I like the idea of HELOC property 1 and using that to put down on another 3-4 unit at 20%+ dp. Then focus my cash flow on paying back that HELOC asap. I'm worried that if I were to take out that 2nd mortgage and then approach lenders even with 20%+ down I would be denied so maybe that's the point that I create an LLC and use a Portfolio Loan (?)

Keep the ideas coming! I'm loving the chat!

Hi BP crew! So excited to reach out today. Hopeful that I can get some advise to help me keep pushing forward in my REI journey! I purchased my first 3 unit FHA in APR 2018, and then my second property, a 5% down duplex in JAN 2020 (currently occupying 1 unit). I have $41K in savings and quite a bit of equity in the props already, due to market appreciation! My agent who is really more of a mentor, told me early on in this journey that "Savings don't buy houses, houses buy houses."

I have this decent savings built, but would like to hold onto it as E-Fund, CapEx savings and coming up here pretty soon, a new vehicle (will buy used). I reached out to my lender (used on both deals) and tried to get preapproved for a 5% down owner occ loan on a single family with an in-law apartment (duplex). I was wasn't approved because my DTI: is too high now. I'm looking at my savings and saying it isn't quite enough for a 3-4 unit in the area at 20% dp, and I'd be leaving myself vulnerable. I see the equity I have, despite buying with low downpayments, and keep thinking; am I going about this wrong? Am I attempting to save more, when I should be looking at doing what my mentor said years ago - use the equity I have to buy more houses.

Prop 1 (3.5%dp FHA 2018) - Purch. Price $373K - Current Market Value: $525K

Prop 2 (5%dp Conv. 2020) - Purch. Price $280K - Current Market Value: $460K

I need some ideas to think on, terms to research and advise on how to get this ship moving again. I don't want to stall out with 2 properties at 31 y/o! Have to keep pushing! Thanks BP! Love you all, and have a great day!

The Subdivision is possible and there are plans already made showing 10 acceptable 1-1.5 acre lots. I guess I'd have to take another route and find an investor (I have one in mind) to develop the first, say 5 lots at 20K (estimate). Total 100K at a 40% return, he makes the first 140K and I take the remaining 160K to develop the remaining 5 lots... another 100K. Total profit: 260K

Is that more reasonable? Set aside Part 2, say the Biergarten/wedding venue was or wasn't approved. Does the process make more sense now?

Thanks!
-Nick

BP Land Developers/REI,

I'm trying to understand how a potential deal would work and need some help/advice on buying raw land and subdividing lots off of it and then building my dream business (Biergarten/Wedding Venue). I have a deal in mind...

Part 1
$220,000 for 46 acres, some of which over looks a beautiful lake in Maine. There exists a master plan (which would need to be tweaked for my idea - read on!) for ten 1-1.5 acre lots. There is a rough cleared road, but no actual road/water or electricity. My first question is if I put down 30% to secure the land (66K - all my capital), could I immediately begin selling the lots?, taking the profit and using it to build the road, bring utilities to the lots etc. Basically just do one lot at a time? My market demands about 60K for a 1-1.5 acre lot. Assuming each lot requires 20K to develop (is this a decent estimate?), say the first lot sells, I develop that lot and 2 others. Those 2 sell and I have 120K to develop the next 6 lots. Those 6 sell and I develop that final lot for 20K out of my 360K profit. Leaving me with 340K profit. Does this all sound possible? What am I forgetting?

Part 2
I've used 15-20 acres on the subdivision and now have the capital necessary to develop my dream business of owning and operating a biergarten/wedding venue. The open air pavilion would look out over the lake and the biergarten would serve as the reception space when weddings are booked. I would do much of the clearing and building myself as my family owns a construction company, but I would basically just build as much as possible for the 340K on the remaining 26 acres of land.

Is this possible in the order I've laid out? Thanks so much!!

-Nick

Would it be something where, he gives me the down payment to purchase a multi, but he gets all cash flow while I work the units, and I begin building equity for long term exploitation?

I am an Architect and so I'm also thought about him providing a 30% Construction Loan down payment, to design, project manage a home for sale. In which he would sell, get not just commission, but also his money back plus a specified return of say 10% of sale price. I profit the remainder of the sale?

I'm looking for specific scenerios I could bring to the table and be prepared to discuss.

BP Community,

I recently bought my first multi-family property (3-unit, living in one unit renting two), and during the process my broker, and really became my mentor. He owns 15 multis and has the expendable income to make moves when he sees value. He has taken a liking to me and was impressed by my research and excitement to get into the REI game (largely thanks to BP!!). He told me the other day that if I ever wanted to partner on a project, to let him know, because he would be down. This was super exciting for me, and had my wheels turning!

The problem is I haven't been able to understand (or know where to look) what deals are possible, or which he would be interested in doing with me. I have energy, focus and time on my side; he has the money and experience. I'm wondering, what are a few idea starter scenarios I could begin to dive deeper into understanding? What deals could we make that would be mutually beneficial? How can I use this great opportunity to advance my current cash flow and expedite new investments (faster than waiting for 20% equity to be built in my 3-unit)?

Thanks for always being a great resources for ideas and information!

-NEB

I'm working through my first year of landlording and constantly looking for ways to invest again. My mentor (and broker) taught me that jobs don't buy houses, houses buy houses. So I'm improving my current 3-unit (FHA occupying one 1-bed with my fiancé), and waiting for that 20% equity in 3-6 years time. In the meantime my relationship has developed with my mentor and he said something the other day that started turning my wheels. He said "I'm all ears if you're ever looking for a partner".

I'm reaching out to my BP friends to see what that might looks like. He is a man with plenty of disposable income, so I sort of assume that would be his major contribution. I on the other hand I am just starting out and would need to use my time and energy to contribute. So I'll take a rough stab at a deal and that might spur conversation.

I see it potentially going like this; He fronts me down payment/CC and I buy the property. I work it, improve it, fill it and rent it for 5-6ish years with no cash flow returns. At that point he is paid off with a 25% - 40% return. At that point I resume all cash flow gains and refi for that NEXT prop! Let me know if I'm anywhere close!

Thanks everyone!

@Winston James Thanks for the advice Winston! I think that’s a great plan. Accumulate some cash and then reassess the current situation as well as recalibrate future trajectories. I always appreciate the advise of those who have gone before me. Thanks!