All Forum Posts by: Paul Bergagna

I'm looking for suggestions on financing and/or grant programs for rent/income-restricted properties, in particular the HUD "HOME" program.

Thanks in advance!

Use Google and talk to a bunch of lenders to see what they can do for you.  that's what I did.  I last used Tower Federal Credit Union (based in MD) and they had awesome terms.  You can probably find some local credit unions that can get it done.

Perhaps you could suggest a discount to market taking into account that when selling the property you're on the hook for a 4%-6% broker commission.  

Also, if the heirs would be so inclined, perhaps pitch a no-interest or low-interest owner financing....but this might get tricky in this instance.  

In the interim, educate yourself.  It would be prudent to talk to a few attorneys and run some of the various scenarios by them.  Also, talk to some local sales brokers for their opinions of value.

My grandparents left their beach house to my Dad and his sister and they sold it...I was a teenager at the time, and if I had the means to have purchased it at the time, I would have.

It's tough dealing with "mom & pop" sellers - don't expect to get great records.  They should be able to provide a crude rent roll and provide utility expenses.  You can ask about the taxes/insurance but you should just pull the tax expenses from the city/county and get an insurance quote yourself.  Easy enough.  Look online and talk to brokers to determine the market rents.  Make sure that you have a broker on your side, unless there's a reason not to.

Once you have those, you should be putting together your own underwriting based on the in-place cash flows, as well as your stabilized proforma @ market rents, your estimated RET upon the sale, and your insurance quote.  

Once you feel comfortable with your analysis, you can make an offer via and LOI (letter of intent), and make the PSA contingent upon receipt of all required due diligence if not yet received. At that point, You'll want to make sure that you at least have copies of the utility bills and the leases, to verify the rents at the property.

Again, it's tough trying to get good info on these small deals, especially if they don't think you are serious.  You need to come with own analysis, get comfortable, make an offer, and then make the PSA contingent upon getting the rest of the due diligence.

You might be able to find some decent 2-fam in Stamford or Norwalk under $400k.  I'd recommend Stamford, simply because of the ease of commuting into the city.  

Be weary of the Seller's motivation to close so quickly.  Make sure that you don't skimp on all your due diligence.

Having a background in construction will serve you well going forward in your path to development.  I would think that the PM track would provide a foundation in development.  

Aside from understanding how to build the buildings and how much they cost, you'll need to know how to understand how to analyze deals at a higher level to see if they make sense - what are the rents/sales you expect to achieve, what are your financing costs, what's the timeline....

I would strongly suggest taking real estate and/or corporate finance classes as well - preferably as a minor if you're able to.  

I have a similar background - my undergrad is in civil engineering.  Over time, I've transitioned more into the real estate finance side of things, but having a solid background in construction is in valuable.   If you want to fast track your career - work directly for a developer when you graduate, not for a CM.

You can have a dumpster delivered / picked up right from the site for a few hundred bucks.  

I salute your hustle, my friend.  Congrats.

Military bases are another driver for demand along the same lines of universities and hospitals.