All Forum Posts by: Account Closed

I once wanted to start in commercial w/o any experience, money, or connections... and I had a few casual interests from people who wanted to buy in w/me when I found a property....long, long ago.

THEN, I got sober real quick as I began getting familiar with my market.

Not to burst your bubble, but if your first question in delving into multifam is "where do i get HML?"... there are easily 50 more questions that precede that one. and then, after you discover the first 50 questions to ask, you'll find out quickly that HML for a true commercial multifam property is not necessarily the best way to finance your first deal.

A really good place to start would be to first understand the numbers. How do you know a deal is really a deal? What kind of DD (due diligence) do you need to do to ensure the numbers you see before you are accurate and valid? What are ALL the risks to be aware of in evaluating a multifam? Mind you, these few questions aren't necessarily at the top of the list of questions to ask... but they certainly precede the question of where to find an H-M-L.

here's a good book that will get you started with what kind of numbers you'll need to know/work with: (there's no affiliate link to this url): What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures

but even before asking specifics about commercial real estate (this is one of the top 5 questions for sure to ask yourself), you need to step back and ask yourself: What are all the options for me to get started in real estate? Where should I begin in RE and Why? Once you understand all (most of) the benefits and risks for where to start: residential, commercial... as an agent, investor, agent-investor, bird-dog, wholesaler, rehabber, being a pro in re (lender agent, appraiser, etc.), THEN you will be better prepared to start.

While you don't have to take such a comprehensive approach in determining where to start your REI career, one thing I can't emphasize enough: Wherever you start, whatever you choose... FIRST understand how to determine with one eye closed and with pencil and paper if a deal is truly a deal ... AND how much profit you can make given your top 2-3 exit strategies on the subject property.

You can't know that without knowing your market and your numbers... in fact, even before knowing your market and numbers, you have to be certain you're working with the right/accurate data that will help you properly evaluate your market and numbers for your subject property.

Again, I don't mean to rain on your parade, but you're best served first understanding what makes a property a deal, before seeking an H-M-L'er. in fact, how you determine value will be (should be) similar to how your money source will evaluate your deal. If you don't know what they're looking for in a deal, you won't get too far even if you found a lender.

Much luck and success in your journey, and welcome to BP!

for now, why not wait til your property breaks even or even becomes profitable, then sell, rent til the bubble bursts, and buy 2 for 1 on what you can get today?

meanwhile, you can be a private lender to other co's that are already successfully flipping and just collect your 12% while building up your nest egg for a bigger entry after the market pops? just from a conservative perspective, for lack of a solid strategy to get your property above water, don't feel like you have to invest (flip, buy/hold, etc) like everyone else. it may be more prudent to work with the market for better leverage. I'm not sure how it's looking in your market, but here in cali, a bubble's a blowin', and I haven't found a way (aside from buying 30% below market) to lock in profit securely while the market creeps up in price. what happens if the market decides to change direction after summer and I'm in mid rehab on a property that was AT market value on purchase b/c everyone and their mom decided to be an "investor" of the month??

given the current economy, macro and micro, I'm still trying to better understand a safe play before jumping in on my first flip. maybe when inventories are more "normal" and demand isn't spurred on b/c of the unusual circumstances (low mortgage, low inventory, high demand - hedge, small investors, & retail monies), i will be able to see more clearly. in the meantime, will continue the search for #s that make sense... but no way am i joining the multi-bid party on a subpar property in a subpar location w/an overpriced price tag...

and like you said... you worked too hard to build up your credit only to get knocked down out of impatience or lack of a solid/sound/prudent business plan to start your rei career! you're in a great position to enable the sale in an uptrending market. milk it, earn interest, then buy when everything is for sale bogo (buy one, get one free)!

from a practical standpoint, you can make your point of having the property off market and support the non/partial refund with that reason for keeping the deposit...

assuming you'll get resistance to this idea, you may want to counter that resistant response with a partial refund as mentioned above by others... to the amount that's not worth going to small claims court. Based on the person's financial situation that you had the opportunity to see by credit check, I would imagine you are fortunate to come up with a good guesstimate of what that number would be.

from an outsider looking in, 50% might be a good place to start! :)

Brian Hoyt maybe the perception of more stability... don't have enough data from both sides to determine that tho.

nice... kinda funny thot occurred... i wonder how many have your list reversed getting into REI!

I'm definitely more a fan of senior section 8 than anything... plus that seems to be a good/stable target tenant too compared to other stages of life.

haha... who still uses that?? do they still use that out there in TX ("word!") or is that more from you than a local thing? I had flash backs of the 90's... boyz 2 men, color me badd, c&c music factory, etc...

WORD UP! indeed, haha! sorry... just had to ask.
*******

AHEM... ok...

so what jon asked and what appeared to take place... that sounds like you chose by disciminately... also, just because the word is loaded and has negative connotation doesn't mean that it's a bad thing. so you had a personal preference that wasn't based on financials or racial issues... maybe more along the lines of trust and personal relationship.

Hi Bill, I used to believe it was because I was a nice guy and I found the deal... and I'd offer to learn as much from my partners & the transaction and only collect my share at the end of the transaction.

PLUS, i have a profile pic and they like my profile pic...

Hey J,

after having gone thru MBA school and learning the skills relevant to your success in RE, would you still have pursued your MBA? if you knew you were gonna do what you're doing today back then, would you have still? What's the alternative track to the path you've taken to get to where you are today (outside of obtaining your RE lic)?

this is, of course, seeking a third option outside the assumed choices of MBA or Trial & Error.

as always, thanks for your time and attention!

Hi Bryan, just curious... what's the turnaround that you expect for completion of build from start to finish? I'm assuming to complete / list ready

You've gotten great responses so far and how much covered for the other concerns you posed:

death (i think you mentioned insurance?),
divorce, bankruptcy - (this can be covered by a legal contract, yes? i dunno - just asking)
etc. [Natural disaster, huge sinkhole where earth swallows it all up, etc] - insurance?

to summarize my query:
1. Where are you in terms CYA for subject property?
2. What's the estimate for build for your ideal ready to list time (or at least before offseason)?
3. How open is the seller to options presented so far?

I hope this pulls thru for you!