All Forum Posts by: Paul Magda

I need help analyzing a creative finance deal:

here is the breakdown

425k ARV

350k Purchase price

100k down payment

75k rehab costs

Here are the terms: the homeowner is willing to carry 250k for 30 years principal only AND defer payment for 1 year.

She wants first position, but my question is: If i cash out refi after rehab and pull out enough to pay back the PML, will the bank assume 1st and then kick her to second? Or is a cash out refi not doable if there is a first position held already?

Is this a bad deal or are the terms good enough to justify buying the property at a much higher price point at $350k?

Thank you so much

Hello,

I have a 0.5 acre parcel of bare land that I am currently looking to develop. All paid off, no loan on the land and its located in Roseville CA.

I plan on developing a RCFE home where I can run the business..I am currently in the research stage on how I can fund this development with little/no money out of pocket.

Are DSCR loans even available for new builds/developments like this? If so how are the limits calculated? An RCFE is a very profitable business and can produce some great cashflow. Will this effect the limits?

OR

Are there better loan options/products available for this?

Any input will be greatly appreciated. 

 Thank you for the reply, Charley. I appreciate the feedback.

 I did not post in the original post but would this deal be a good seller finance option also?

Hello all,

I am a solar sales rep by trade but have been fond of real estate investing for years.

I recently went out prospecting and found a VERY dilapidated home that needs a complete gut/remodel. It is a 3/2 1290sqft starter home. The owner is ready to sell and would like to sell in the next few weeks of we can come to an agreement.

When I saw the house I went back to her and made a verbal offer that was about 110k lower than what she wants. She refused the offer but I opened up the negotiation with this. 

My question is: what would be the best play here? Do I attempt to wholesale the deal (if this option, what is the most I can offer her?) OR do I do a hard money loan and sell OR refi and long term keep? 

Any advice would be greatly appreciated. 

@Greg Gaudet

Shoot me a message with your contact info and we can schedule a call asap.

Hello BP community, I have recently come across a gentleman who owns a portfolio of 45 properties. Of all the strategies, it was D4D. He is a tired landlord who actually does all the property management himself. He is wanting to retire and move to Hawaii (currently in CA). He is unable to as he has not found a true property manager he can trust in all the years he's been investing. 

He is forced to sell as a bundle and can not part out as it would interfere with this exchange. 

My first thoughts are to pass the deal along but whoever purchases this portfolio would be an instant millionaire at the price point he's selling at. It's hard for me to pass that along.

My second thoughts are to find a lender and dissect the portfolio and sell off one by one. 

Is it naive to think I can find a lender for this portfolio? He's willing to sell low and take a haircut, so long he is able to 1031 in to a different, hands off property. 

All the homes are within a few miles of each other and are rented out. He's currently bringing in a hair over 60k a month in rent alone.

Any input and suggestions/ advice or a referral to a lender would be greatly appreciated.

Thank you BP community. 

How did this play out? I have a deal similar to this just a few more units. I am attempting to find funding. 

@Dave Foster

Thank you for the input. The owner finance method has been brought up before by another contact of mine.

I am not entirely familiar with this. I will do some more research since it has been brought up before but how exactly would he get "bought out"? I would appreciate your perspective on it. 

Thank you again.

In the last year I started to dive into REI. I read books, podcasts, YT videos, networking etc...

Short background on me: I am an entrepreneur who tends to perform well in times of pressure and that is why I put myself in this situation. I am involved in a few other business ventures but nothing wild.

Nonetheless, four months ago I decided to quit my "safe" job and start looking for my first off market deal. I started to drive and took me a few weeks to become comfortable in what I was doing. I developed a system of driving, address, skip tracing, cold calling to meeting with motivated sellers.

More recently (2 weeks ago) I honed in on a specific area very close to my residence and a specific name kept popping up. I picked out about 6 properties over a month or so that all came back to the same owner. I decided to call him and found out he is a landlord who owns 45 properties!

Keep in mind, I am new to the game and do not even have one deal under my belt BUT I am of the philosophy Ready , FIRE, Aim.

I developed rapport with him over the phone and after a couple of days I met him at one of his properties and actually helped him prep the home for a tenant as this particular home was vacant.

Long story short, he's an older gentleman who is ready to retire. He wants to sell his portfolio and exchange into a NNN lease wherever it makes sense. He doesn't want anything to do with management, just wants to exchange into a property, collect his check and live the rest of his days in Hawaii. I am connected with a commercial broker and we are confident we can find something for him to exchange in to. He is the sole property manager for his portfolio and he wants out.

I simply asked him and he is allowing me to facilitate the deal to help him retire. And I told him I can do it.

He is willing to sell at a discounted rate as some properties do need repairs. Most, I would say, are class C properties. I performed comps (similar sold off zillow in last 90 days) and his portfolio is worth approximately 11.1M ARV. He'd sell at a 15-20% bulk discount minus MAJOR repair costs.

I am at the point where I am trying to see what the best possible outcome is. (I am now AIM-ing)

For him: Sell, exchange, collect check and retire in Hawaii.

For me: ?

-Do I?

i) Present the deal to a more sophisticated/seasoned investor and ask for a "finders" fee?

ii) Attempt to finance the deal via Hard money/private lending and sell them off individually at a discounted rate (quick turnaround)? 

iii) Can I somehow facilitate the purchase with private money, refinance, and end up owning the properties and keeping them as "my" rentals?

My goal is to get more input into what the best option for this situation is? Any insight is GREATLY appreciated.

P.S. I have reached out to a few contacts I have met over BP and I am very grateful for the insight they have provided. Thank you.

Hey Drew, welcome to BP!

Let's connect, I am from Sacramento as well.