All Forum Posts by: Owen Dashner

Our 2 most consistent producing marketing channels are PPC and direct mail, each generating about 2 deals per month. We get an additional deal or so per month from our SEO, our network of other investors, wholesalers and agents. Believe it or not, we have also bought more deals off of the MLS this year than any post-recession year before.

I would assume KC has a similar audience of sellers as our market in the Omaha area.  Good luck - feel free to DM me if you have additional questions.

@Scott M. what you said makes some sense. What's weird though is that a lot of these "unpriced" listings have no other financial information listed for an investor to do initial underwriting on.  So, if the point is to weed out investors that are tire kickers, you'd think the listing broker wouldn't want 1000 inquiries asking for the financials/OM.

I guess the better question that I should be asking is, how can an experienced investor best use these types of listings to their advantage?  

@Scott M. But I am not a new investor, and that's my point. If I am thinking this way, so are other experienced investors.

Does anyone else find it extremely irritating when properties (typically mid-sized to large multifamily lately) are being marketed as "unpriced"?  I'd love to hear from experienced brokers who could explain why doing this is beneficial for their client. The first filter most investors use is list price, so it would seem to me that leaving an asset unpriced would mean that you are not even showing up on the radar of a lot of investors, which would obviously reduce your pool of potential buyers.

I am seeing this more and more lately, so I'm sure there must be a good reason for it that I am not thinking of.  What am I missing?

One thing to keep in mind is that different states can have vastly different regulations around lending and borrowing, so lenders may operate only in specific states vs. nationwide.  So, when you are asking around for lender referrals, make sure you are specific about which state(s) you are inquiring about.

As Quinn mentioned, real estate meetups and local REIA meetings are a great place to meet lenders, and also a great place to ask other investors who they use or who they have heard are good ones to work with.

Also check out the "Network" tab at the top of the BP page and look at the list of Hard Money Lenders for some possible leads.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Council Bluffs.

Purchase price: $155,000
Cash invested: $1,000

This is a purpose built duplex in Council Bluffs, Iowa that we bought from another investor who was looking to sell and 1031 into something bigger. The interiors of both units were in fantastic remodeled shape and way under rented. One unit is 3 bed, 1 bath, the other is 2 bed, 1 bath. The 2 bedroom unit vacated shortly after we purchased, and we raised rent from $650 to $995. The other side is rented for $850, which is also low.

What made you interested in investing in this type of deal?

Off market, well-maintained, value add, built in equity - everything that we love!

How did you find this deal and how did you negotiate it?

The owner was referred to me by a mutual friend who I had asked about buying some of his properties. We bought 2 duplexes from this seller and offered cash, as-is with a quick closing. He liked the "no headaches" offer and worked with us on price.

How did you finance this deal?

We bought it with our LOC, then got it appraised ($190K), then got a cash out refi into a 20 year am note at 4%. We have no money into this deal and it still cashflows well.

How did you add value to the deal?

We are going to put new siding on it to give it more curb appeal, but that will be a spring project. We will be renting out the 3 bed side for $1100 once the existing lease expires.

What was the outcome?

Cashflowing rental with no money into it, and good residents with little deferred maintenance.

Lessons learned? Challenges?

Tell everyone you are looking to buy properties (and be specific about what you are looking for). This deal would not have happened if I had not told my friend what I was looking for.

Investment Info:

Large multi-family (5+ units) buy & hold investment in Omaha.

Purchase price: $1,835,000
Cash invested: $450,000

This is one of my favorite properties that I have ever bought. 31 units, originally built as a hospital, converted to a hotel, then finally converted to apartments in the 1980's. Units are all electric and have individual panels, water heaters, and HVAC systems. The property was owned by a non-profit and kept in great shape, but under rented. I won a bidding war to land a great deal. It has an elevator, a penthouse suite and also comes with a parcel of land that has a billboard.

What made you interested in investing in this type of deal?

This property is on the historic registry and is right in the heart of midtown Omaha in the path of progress. The existing rent roll was $20,000/mo. at purchase, and we have since already increased it with some lease renewals.

How did you find this deal and how did you negotiate it?

This property was being marketed as a development deal of an entire city block. The other 2 parcels were a large office and a small office, of which I wanted neither. I waited until they opened each parcel up to offers before I jumped in and made a strong offer. They were asking $1,695,000. I ended up using an escalation clause with me beating the next highest bid by $10K. I won the bid at $1.835M.

How did you finance this deal?

I used a commercial bank with 75% LTV, 5 year fixed, 25 year am at 3.5% interest. My downpayment was 1031 exchange proceeds from another property I had sold a couple months back.

How did you add value to the deal?

There are all kinds of value add opportunities on this one. The units are under rented by about 15% across the board, and there are no utility or CAM billbacks in place. We will be increasing rents organically upon lease renewals, plus doing cosmetic upgrades to force additional rents, as well as implementing some RUBS to add more to the NOI.

What was the outcome?

It is still a work in progress, but this should be a cash cow within about 18 months.

Lessons learned? Challenges?

Tuck pointing, flat roofs and elevators are not cheap. I had minimal experience with all of them. Large price tags!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Stephen Ward with Exceptional Properties Group

Investment Info:

Single-family residence wholesale investment in Council Bluffs.

Purchase price: $67,500
Cash invested: $1,500
Sale price: $103,500

Off market (PPC) lead from a seller who did not want to deal with being a landlord anymore. The house was in Council Bluffs, Iowa and needed quite a bit of work, but we were able to buy it with a decent amount of equity. We ended up wholetailing it on the MLS for $103,500, minus about $4K in closing costs and concessions. We ended up netting about $25K on the deal after all costs were taken out. On to the next!

What made you interested in investing in this type of deal?

Love wholetails in a hot market. We could have made probably $15-20K more by rehabbing this property, but it would have taken 3-4 months from key to key, so we took the quick $25K profit and moved on.

How did you find this deal and how did you negotiate it?

The seller owed about $60K on his mortgage and needed enough to pay it off plus a few bucks. It was a good deal at that price, so we took it.

How did you finance this deal?

Line of credit with 5 Points Bank.

How did you add value to the deal?

We replaced the fuse box with an electric panel for $1500.

What was the outcome?

$25K profit, sold it as-is to a DIY homeowner.

Lessons learned? Challenges?

I had told our electrician to replace the fuse box when we first bought it and thought we were going to rehab it. I then forgot to tell him to not do it when we decided to sell it as is. $1500 forgetfulness tax. Whoops.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jay Kathol with Berkshire

You should not be putting offers in on properties that you have no ability to close on yourself, period.  That is a quick way to get a bad reputation when things go sideways.  Put in the time to develop relationships with hard money lenders and private lenders who can serve as your failsafe for closing on a property if your end buyer does not perform.  If an established hard money lender won't loan on the project, you shouldn't buy it because it is likely not a good deal.

Looks like you are getting some good responses here. I would also recommend joining the Indy REIA Facebook group as well as searching for other meetups. Post the same question in the group threads.