All Forum Posts by: Gregory Caccioppoli

Hello all RE Vets/Professionals/Mentors/People with knowledge willing to help,

From my description you know the general issue I am having. I have access to funding through established relationships via performing construction projects for the private investors. I am tired of just getting paid as a contractor. Here is what I want to be able to do but I need some feedback from someone who has been in my shoes on how to structure a deal like this so that I can keep my lender(s) happy, and  put myself in a position where I acquire an asset, generate a nice source of income from the project, and when the project is done I created a source for passive income.

My Plan: 

I want to find a commercial or multi family residential deal that I can use the private lenders borrowed equity to purchase, renovate/increase the value (doesn't have to be renovate), 6 months later cash out refinance, then either A) pay lender back an agreed percentage balloon payment on the refi or B) the whole amount if there's enough to pay lender in full, depends on the deal since I am aware that I can only cash out on 75% of appraised value, and if I couldn't pay them back the whole amount on the refi, whatever balance is left over depending on the deal give them an equity stake in the property, or re work terms for the remaining balance based on the income this particular property is generating. My plan is to use the tax shields provided to RE Professionals to help my lender/investor maximize their return and me maximize my return. 

My Question in Summary:

Can this work? If so, What are some creative ways to structure financing for this? What does an investor want to see/expect return wise out of a deal like this (6%-10% APR)? What are the hidden/technical aspects of this plan that I should be aware of? How do I structure this so that it benefits both of us to the max? Can anyone offer me books that you think may help me knowing what I am trying to accomplish? Are there any books out there on a bunch of creative ways to structure financing for deals?

Thank you all in advance for any help you provide!!

Hello! Can someone please advise me on the specific steps an investor needs to take to analyze a property that's in an area unfamiliar to the investor? Also sources for where to find the information along with each step? Example) 1) Gentrification - how does one identify this in any given area? What are the sources? 2) Will the property rent in the area? How do I find information that makes me more confident as an investor? The two examples given are just the first two things that came to my head. I'm looking for a clear, concise, step by step "checklist" if you will, that I can go through and by the time I'm done I know everything about the area, I've analyzed all pertinent data, and I've ran the numbers. Thank you in advance for any help!!!

Investment Info:

Single-family residence other investment in Scarsdale.

Purchase price: $925,000
Cash invested: $1,100,000
Sale price: $2,520,000

Knock Down Old House in Beautiful Neighborhood. Build Something Never Seen
Purchase Land = $925,000.00
Closing Costs on Purchase = - $36,000.00
Construction Loan Fees and Interest = - $54,000.00
Closing Costs at Sale (Incl. Transfer Tax and Broker Fees) = - 132,250.00
Interest to Hard Money Lender ($1,068,070.25 @ 10% APR, Funds were provided as needed, Up to C of O was Issued, Total 16 Months) = - $166,778.11
Total Construction Costs = - $982,680.00
Total Profit on Deal = + $228,291.89

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

I worked for the Village of Scarsdale for many years and did inspections for the builders in the area and saw how much money there was to be made.

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

Through my established connections from working for the Village, I connected with the local agents and through persistence came across it.

How did you finance this deal?

Hard Money Lender and Bank Financing.

How did you add value to the deal?

Built a Modern, Sleek, New Home that has never been seen before in the area.

What was the outcome?

We had a two bidding wars that wound up leading to the potential buyers asking for ridiculous contingencies, and the third time was charm. My finance breakdown is in the description.

Lessons learned? Challenges?

I certainly learned which subcontractors I will be using again and the subs I will never connect with again. I learned that my agent is my best friend and key to executing the deal, It was challenging to put together the financing, but now that I have a reputation, things are getting a bit easier. My hard money lenders certainly love me, as well as the bank.

Investment Info:

Single-family residence other investment in Scarsdale.

Purchase price: $925,000
Cash invested: $1,100,000
Sale price: $2,520,000

Knocked Down Old Dingy House in Beautiful Neighborhood. Build Something Never Seen
Purchase Land = $925,000.00
Closing Costs on Purchase = - $36,000.00
Construction Loan Fees and Interest = - $54,000.00
Closing Costs at Sale (Incl. Transfer Tax and Broker Fees) = - 132,250.00
Interest to Hard Money Lender ($1,068,070.25 @ 10% APR, Funds were provided as needed, Up to C of O was Issued, Total 16 Months) = - $166,778.11
Total Construction Costs = - $982,680.00
Total Profit on Deal = + $228,291.89

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

I worked for the Village of Scarsdale for many years and did inspections for the builders in the area and saw how much money there was to be made.

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

Through my established connections from working for the Village, I connected with the local agents and through persistence came across it.

How did you finance this deal?

Hard Money Lender and Bank Financing.

How did you add value to the deal?

Built a Modern, Sleek, New Home that has never been seen before in the area.

What was the outcome?

We had a two bidding wars that wound up leading to the potential buyers asking for ridiculous contingencies, and the third time was charm. My finance breakdown is in the description.

Lessons learned? Challenges?

I certainly learned which subcontractors I will be using again and the subs I will never connect with again. I learned that my agent is my best friend and key to executing the deal, It was challenging to put together the financing, but now that I have a reputation, things are getting a bit easier. My hard money lenders certainly love me, as well as the bank.

Investment Info:

Single-family residence other investment in Scarsdale.

Purchase price: $925,000
Cash invested: $1,100,000
Sale price: $2,520,000

This investment was New Construction. Using hard money lenders, on the purchase of the property and part of soft costs, and a construction loan through a local bank to fund the construction, I purchased a plot of land in Scarsdale, NY and built this beautiful 5 BR, 6 Bath, 5,408 Sq. Ft. Single Family Home. The numbers were as follows:

Purchase Land = $925,000.00
Closing Costs on Purchase = - $36,000.00
Construction Loan Fees and Interest = - $54,000.00
Closing Costs at Sale (Incl. Transfer Tax and Broker Fees) = - 132,250.00
Interest to Hard Money Lender ($1,068,070.25 @ 10% APR, Funds were provided as needed, Up to C of O was Issued, Total 16 Months) = - $166,778.11
Total Construction Costs = - $982,680.00

Total Profit on Deal = + $228,291.89

Scarsdale Homes Fly Off of the Market along with other Westchester County Areas. We had 2 buyers fall through prior to locking in on the third buyer, because after they sent an offer they asked for costly contingencies that were not acceptable to me.

The home is the highest sold, per square foot house, in the Edgewood Area of Scarsdale in History. I am very Proud of That ! :)

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

I worked for the Village of Scarsdale for many years and did inspections for the builders in the area and saw how much money there was to be made.

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

Through my established connections from working for the Village, I connected with the local agents and through persistence came across it.

How did you finance this deal?

Hard Money Lender and Bank Financing.

How did you add value to the deal?

Built a Modern, Sleek, New Home that has never been seen before in the area.

What was the outcome?

We had a two bidding wars that wound up leading to the potential buyers asking for ridiculous contingencies, and the third time was charm. My finance breakdown is in the description.

Lessons learned? Challenges?

I certainly learned which subcontractors I will be using again and the subs I will never connect with again. I learned that my agent is my best friend and key to executing the deal, It was challenging to put together the financing, but now that I have a reputation, things are getting a bit easier. My hard money lenders certainly love me, as well as the bank.

I have the cash and I have the ability to perform any type of construction whether it be new construction or quick flips, but now I am struggling with finding the GOOD DEALS. I am looking for advice on strategies to use in finding the right properties.