All Forum Posts by: Nick Kaihoi

Thank you to all that have responded so far. It has helped me formulate additional questions that I need answers to and with any luck, I will have those answers in the coming week. I'll make sure to keep you all posted!

As @John Woodrich said, I also don't know if this type of arrangement is something I am interested in because of lack of control. Truth be told, when I received the initial phone call I didn't even ask any questions, I simply said I wasn't interested. However, I called back within 60 seconds because I realized that if I don't ask any questions, I have no idea what I just said no to. It was then that I realized I could be paying for education - if this is the type of education I want. 

Hello BP,

I had a deal 'fall in my lap' and although I'm still gathering details, I'll put what little I do know about it here for your review. I'm meeting with the primary investor today to gather more info, however, what I really need to figure out is what I don't know and more specifically, what questions I need to ask. I've already consulted with my lawyer which was very productive but am hoping I can gain some additional advice from all of the fine people here on BP. Additionally, I have equity in several of my other rentals but am curious on what other options are available to me for financing. 

15 unit
Appraised last year at $1.5M by 3rd party
Unknown how many total investors - best guess at this point is 5 (40%, 20%, 20%, 10%, 10%)
Solid class B/B+

10% investor wants out
10% investor had the property appraised recently at $1.9M

Obviously I need to meet the other investors, figure out why the 10% owner wants out (sounds like personal differences), what the long/short game plan is, income/expense, any debt that is being carried, rental history, hopefully I can get a copy of the Operating Agreement prior to the vetting period, and speak with the seller to negotiate price and terms. BUT, what else should I be asking about??

The primary investor is someone I've "known" for almost a decade but we've never really gone beyond a friendly hello when we would see each other. A friend of a friend situation. That person is aware that I don't have experience in commercial properties (I have 5 SFH, 3 of which are rented) and is willing to coach me and help me get into the game. I wholeheartedly believe this person is genuine for reasons I won't get into here, you'll just have to trust me. With that said, I'm not looking for a slam dunk, I'm looking for an opportunity to grow, learn, and am willing to "pay" for it by way of an average deal as opposed to a great deal. Although, we all want a great deal, right?!

Thanks, BP!

@Evarson Azevedo you should connect with @John Woodrich

Hi @Christopher Hall ,

I've successfully executed 3 house hacks exactly as you have described with very few bumps in the road. Providing you take care of any outstanding maintenance needs while you are homesteading the property and properly screen your new/first tenants (aka: don't get too antsy to get tenants over getting the right tenants), it should be a relatively pain-free process. 

The biggest hurdle I had on the 3rd property was financing. I hadn't structured my 1st property cash flow/income properly and didn't have a proper lease due to renting to a friend. Between those to things, the mortgage broker and I had to get creative. Do not make that mistake, regardless of who you are renting to. Consult a mortgage broker/lender and CPA on how to do things properly and what the requirements for your loan will be.

The second part of the hurdle was that during the underwriting process for the loan, I was required to get a lease signed on the 2nd property so I could lower my debt to income ratio in order to show that I could "afford" the 3rd property that I wanted to purchase. Without a signed lease in place, my debt to income ratios wouldn't meet traditional financing requirements. This means I had less than 20 days to get the home ready for rent, list it, show it to prospective tenants, wait for applications, screen, select, etc... It was a weeee bit stressful but well worth the effort.

It's entirely possible that your financial position is different than what mine was at the time, but hopefully, my experience will be able to save you some stress.

Best of luck on your journey!

Hi @Andrew R. , 

Unfortunately, I'm not going to be able to help answer any of your questions but I'm responding to make sure I can follow this thread. Seems like it could get interesting! 

Best of luck to you and your family on this new and exciting adventure!

Nick.

Welcome to BP @Kyle Murray , I'm sure you will find all of what you are looking for and more! Seems like you have your priorities straight so now you just need to grind it out! 

This first post should be voted as the best first post in BP history. @Jason Sylka thanks so much! What a great resource. 

For SFRs, I have had excellent results with Open Houses. Granted, it's more work, but you get an idea of the potential tenants prior to even receiving an application. I think of it as adding work on the front so there is less risk later. 

As others have said, FB, CL, Zillow, etc are all excellent options. Also, it's worth checking out online services for the application process as well as credit and background checks.

@Adam Ferro Another warm welcome to BP. I signed up less than a week ago and have met some amazing people already, some of which are on this thread. Sit down, dig in, and get excited! 

@John Woodrich I have not done a flip before, only update a couple of live-in update and rents. I'd be interested in getting your opinion on what a good prospect looks like for a flip. For example, what are your 5-minute analysis number requirements and how do you calculate for unknowns in the rehab process?

FWIW, I have a really good contact (parent of a long time friend) that I have not tapped yet that has been doing land purchase and development for decades. They sell most of their properties that are SFH but have retained 400+ units if I remember correctly. I'm not sure what the property type spread is on the ones they have retained but I plan on contacting them this week and would happy to provide you with what I learn from them.

@Jordan Moorhead I PM'd you about your meetup.