All Forum Posts by: Phil Shearcroft

Hey BP!

I'm trying to find a lender that will lend to an LLC under $75k. Are there any lenders who will give a conventional loan to an LLC under this threshold? I have a great little property in KC that needs a small conventional loan 20% down.

Any suggestions out there? I’m having a hard time finding financing for this amount.

@Logan Hassinger thank you for the clarification. The contract for deed is still an excellent return. Appreciate the insight!

Hey Everyone,

I’ve been considering the purchase of a portfolio of notes on existing seller financed rental properties. They all have different timelines and applicable cap rates. Does anyone have experience with these types of investments?

Most of the properties have some sort of equity and since my company will hold the deed to it could I possibly pull that equity out until the term is complete then pay off he loan prior to the renter getting the deed clear title.

Example:

Original Note: $60,000

Note Face Value: $35,000

Rent payment: $1000/month

Term: 4 years remaining

Value of property: $110,000

Insurnace: $550/year

Taxes: $950/year

If I paid fave value for this note can I put another loan on the property?!

If anyone could comment their experience and suggest a good direction to start I would love to hear from you.

Thanks Everyone

Happy Investing!

@Jon Hill love this thread!

1.) Put 20 doors under my rent and hold portfolio that generate a minimum of $200 net cash flow per door.

2.) Flip at least 6 properties with a minimum gross profit of $10k each

3.) Mentor at least 1 novice foreign investor in the markets I currently invest in.

4.) Read at least 12 books of which half are focused on mindset

5.) Establish a system to cultivate motivated property sellers.

Loved all the responses on here.

Amazing community!

Let’s get it!

@Brad Johnson I did a deal just like this recently and I would like to share my thoughts based on my example.

I usually divide a deal into 4 quarters. For simplicity.

1. Deal Finder/Maker

2. Management (construction, tenants, etc)

3. Financing or ability to sign off on debt

4. Capital required to close

If I were to look at this from a simple point of view I would value each section equally. 25% each.

You are providing capital, management, and deal finding. She is providing lending criteria which greatly benefits you. Since you are both sharing in the oversight and management but your experience is greater than hers she sets to benefit from the knowledge gained. Here is the range of split I would recommend to make it fair but make sure this is only on the first deal and should be revisited as you grow and requirements might change.

You: 60% (Low) - 80% (high)

Her: 40% (high) - 20% (low)

I do think 90/10 is on the slim side. Just my experience. I've had JV's where I was the guy who did everything and all they came up with was the borrowing and capital and they received 20% but this is rare.

Also, another element you can consider is sharing cash flow and equity differently but this can complicate the structure and maybe reserved for larger deals.

Hope that helps!

@Paul Yun there is plenty of opportunities but you need to be creative. Repurposing the asset is the simplest way to create value but that being said it’s not easy. My current BC Investsments are in south LANGLEY and Chilliwack. Chilliwack still produces decent numbers but it’s quickly slipping away. Rent to Value will never achieve the 1% rule unless you tackle Airbnb but that’s a whole other issue. I’ve started investing in the US and Alberta. Much better numbers and sustainable cash flow.

Try looking at Prince George. I haven’t invested there but really like the fundamentals. There is lots of opportunity to repurpose single family into duplex and duplex into fourplex. Jack your rents and you have a great investment. If you do look at PG try to stay more south near Lower College or North of bowl in the “Heart”. Don’t go anywhere near the VLA (triangle of death) lol.

Message me if you wanna meet up and we can chat about RE.

-Phillip

@Nic Stergion what kind of info are you looking for? Raytown is a great investment area. Solid neighbourhood.

Hello BP!

I am a new investor in the Kansas City area and would love to connect with local investors and begin formulating my team. Is there any advice out there for getting started in this market? Property management, contractors, agents, etc. Any advice would be greatly appreciated. I will be flying down next week and would love to meet with anyone that currently invests in the area.

Are there any REI meetups in the area on a regular basis? Facebook groups for investors?

Thank you everyone!

@Rachel H. When you add the lease option to the rental payment of the tenant each month does a lender look at this as part of the Gross Rents when calculating the NOI? Or is this usually excluded?

@Shawn Costley I am looking to BRRRR out several single family and multi in the area. If you are wholesaling we should stay connected as you can likely wholesale me some great finds. Message me and we can connect :)