All Forum Posts by: Scott Seaman

I'm getting some random post that looks like this at the end of the "carpet" discussion. Closed, came back and it's still showing like this for me. Anyone else?

http://imgur.com/dtSiz0J

Joshua Dorkin - here's the thread -

http://www.biggerpockets.com/forums/52/topics/95432-yet-another-carpet-thread

I'm getting some random post that looks like this at the end of the "carpet" discussion. Closed, came back and it's still showing like this for me. Anyone else?

http://imgur.com/dtSiz0J

Especially since this is family - what conversations were there before the deal closed and the work started? He may already have some expectation that you two are in this together and splitting it 50/50 if nothing different was ever worked out.

No one mentioned the "lake-view cabin" part of this. Is this a full time rental area? Or more of a seasonal tourist place? The difference in how much rent you could actually make (plus management fees) between those two could make a huge difference in what you can realistically expect to make in your pocket (or to a final investor if you're going to wholesale it)

I run a NPO that does affordable housing for disabled veterans - individual housing in not normally subject to ADA but does come under Fair Housing Act. Certain exemptions like "55 and older" communities have been included in the legislation while the "disabled only" is not specifically addressed - HUD has some specific programs for Supportive Housing (Section 811) - http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/grants/section811ptl

Best advice would be to contact your regional HUD field office and talk to them about what you want to do; they should be able to provide information about what is available, allowable and any programs that you might fit into. Good luck (and prepare to read through a ton of regulation).

We went and got rather bored at the same 3 people running up the bids for their funds. One was focused more on properties that might have commercial use, while the other 2 basically left their cards up on any of the residential properties (excluding SE) until one or the other got it. This was our first time going but met a number of others there who remarked on how different it was from previous years with the big money guys there so aggressively. Surplus bids of $20-60K that would have been $3-6K last year. By lunch of day 2 there was about a dozen of us joking that the only way anyone else was going to get anything would be to report them as suspicious terrorists to security to keep them tied up for the rest of the day.

Were your comps falling down? Something seems to be missing from your stats or comps listed. Listed property is grossing over $42K/year and two recent sales on the same street barely sold for much more than that?

Thanks for getting back to me Joel, I find myself reading your replies often on other posts.

First and foremost - no sprinklers!! That was the first thing I checked! Basically it's being done on a repair permit so there's no requirement to go beyond code at time of construction vs having to bring it up to today's (ADA would have killed the deal as well)

Almost vacant, last 2 tenants are on their notices, one has found a place that will open within 6 weeks and be out.

Hopefully you can tell me what I must be missing on the repair side. There are 3 buildings w/ 8 2 bedroom units and 4 studio. To bring fire rating back up to where they want it, I have to take down paneling and put up 5/8" sheetrock on both sides of a 16' long wall that separates each of the 2 bedroom units - so 6 walls total. Previous owner literally did one building but no taping, fire caulk or inspections.

4 of the units require me to pull up flooring and pour on a concrete leveler to a certain thickness over the subfloor to get my rating between those units and the studios. Since I'll lose about 10 days waiting on them to cure we'll do them first and come back to them after the other units.

Current market is about 4% vacancy around here. I'm only giving enough cash to clear the debt so that I get a clear title. I think she'd do less if it wasn't for that. I might be able to get lower %'s on the balance as each building gets done and rented but I don't know. As for pricing by cap rate around here, there's not enough to really say there's a trend - last 2 most recent sales were both under 5% (crazy, right?) one sold in 1 day at full list and the other took less than 30 days and got 98.4% of list. In 10 years up here I've always looked at anything in the area and wondered how in the world someone could make money off of it. But it's a college town with limited buildable area, decently low property taxes, town restrictions for several more years on # of water connections due to having to upgrade their facilities and a landlord's cost for maintenance around here is basically zero. I do affordable housing for disabled vets in big cities around major VA hospitals and it's like night and day when I look around here (Atlanta is on our list, hopefully before the end of the year btw)

I don't want to be insulting someone I'm looking to get funding from but I don't want to give away more than I need to either.

Multifamily with 32 units that needs 200K in repairs (drywall & septic system)

Asking price was 650K
Purchase price of 600K

Owner will take 300K cash and carry 300K at 5% for 6 months/ 6% for 6 months and 7% for 6 months unless we pay off sooner

Property repairs are 125K-200K - Septic has frightened other potential buyers, my partner has worked with this extensively for 20+ years and we have engineered plans for repair blessed by local health dept and a couple of bids from local contractors who know the property/area

Major cost is bringing units up to fire code for 1970 when they were built but no fire rating was installed between the units (currently 1/4" paneling, 2x4 studs and another piece of paneling)

ARV would be 1,300,000 - 1,400,000 @ 8.5-9% CAP (even though most recent comps coming in at 70K per door average, this is further from the college and age/condition just don't see this one reselling at over $2M

So if we flip at 90% of ARV based on the caps

1,170,000 Sales price
600,000 Initial purchase
200,000 repair
30,000 carrying costs until cash flowing again

340,000 equity available to share with cash investor as well some additional land that won't be sold off with the building at that time.

NOI would be 9,998/month so 1.98 DCR if we were to refi on $850K after the repairs if we were to hold it long term which would give me $4,800/month cash flow to pay something back on the use of the money

Suggestions on what I should be offering? My preference would be to fix and flip and move on to other projects but I'm not opposed to staying in for a longer term.

Fairly related, and several here may benefit from keeping an eye on this. Basically, the JOBS Act has allowed expansion for getting micro-investments like kick-starter to allow small, un-accreditted individuals to become investors. The SEC is still working out the various rules - but these DC investors have already started down a path into becoming a portal to post properties - you can see more in this article: http://www.theatlanticcities.com/neighborhoods/2012/11/real-estate-deal-could-change-future-everything/3897/#