All Forum Posts by: Mike Nuss

Hey @Neal Collins . Sounds like a fun deal. The background you've given leads to some additional questions. The hard $ situation comes down directly to math (more below). The bigger issues are what is it that you're buying? When are you going to get the leases to see what you're really dealing with in terms of tenancy? The wholesaler should have written in the contract a timeframe for when the seller would have to provide the leases for buyer's review. In Oregon, you're going to have to give 60 day notice to vacate if the tenants have been there more than 12 months. You may have longer than that if they're still in the middle of the lease. Most of your questions will be answered once reviewing those docs. In my experience it's always best to have a discussion with the tenants as well. The building needs 60K in work so I'm assuming rents are below market or the tenants are unhappy (or both?). Getting additional background and motivations of the tenants can be done when completing the estoppel letters. Can yo pay them to leave (cash for keys) early? Will they pay rent increases without all that work? Will they do a rent increase with a portion of that work? Are they potential "squatters" that you're going to have to evict even if you give them 60 day vacate? All of those answers will play into your financing scenarios. 

Can you get in contact with your private $ lender while they're out of town to get a feel for their appetite of this loan? Is it possible to acquire with hard $ at low points and high interest rate (1pt 18% maybe) and then refi once the private $ lender gets back in town?

Will hard $ or private $ rates kill the deal if you have a timely eviction on your hands? Can you extend closing and give 60 day notice prior to closing? Can you increase the price a little and have the current owner vacate the tenants? 

Bottom line is you're going to need those current leases, estoppel letters and a discussion with the tenants to better answer most of the questions. Is the duplex in a good part of town? Does any of this really matter given location, price and upside?

Tom Henderson your state will have laws about personal property left behind. Definitely research those, but the fact they're in a POD may bring on a different legal fight. Call the POD company. They're going to own the POD that the personal property is in and that will probably bring on another layer of rules you will need to consider.

Wholesaling is a tool. Just like many other tools in the real estate world. I don't believe in wholesaling as a business model but it surely is a tool I use in my investing business. The more tools you have the better "investor" you can be. When I show up at a seller meeting I listen to what they have, need and want. The seller and their property will dictate the necessary tools to get them where they want to go. Missing just one right tool can keep you from making a seller happy. Better yet forcing a seller down a certain path, because you don't have the right tool, can ultimately cost your investment business in the long run.

Dave Garlick your cap rate figure is low because you're calculating that after debt costs. Cap rates are figured after expenses but before debt payments. I like how you ran #s based on the higher price. Looks like it's time to offer 50k.

@Brandon G. you can never have too many tools, so always sharpen the ones you have while learning others. 

That being said, the first step in getting creative financing comes from your marketing. We do a lot of seller carry deals. I would say our marketing sets us up for it by the demographics of the majority of our callers. However, the conversation is much more important. No trust = no creative deals. You have to have a comfortable seller in order to get creative in your deal structure. A seller will not go down that path with someone they do not trust. 

@Tokie Laotan-Brown I've found from my experience that it's best to go into a negotiation open minded. Don't preset your mind on what you want. You may feel you need owner financing, but if it doesn't meet the seller's needs you may lose a good deal because you went in without an open mind. Find out what they seller needs (wants are good, but needs are what you're looking for). Ask as many questions of proposition as you can. Their answers will point you in the right direction. Good luck. 

Awesome @Samantha Lotti , great to hear. Here are the details. 

http://myrarebird.com/event/investing-a-to-z/

@Jay Hinrichs I know you've recently met @Taylor Shields. He will be there as well, FYI. 

@Jay Hinrichs Yes sir. Come enjoy a slice of pizza, beer, some good RE discussion and networking. We have a membership, but come check us out for free. If you see value you can sign up after a few meeting "audits". 

Hi @Samantha Lotti , enjoy the meeting tonight. If I make it there I'll say hi. Not sure I'm going tonight either, but will make it a point to say hi if I do. Report back on what kind of deals John went over at tonights meeting if you can. 

I highly recommend (I'm bias, but I'm sure REIA/RareBird members will agree) you attend RareBird's 11/3/14 meeting. The topic is "Art of Negotiation", which is a necessity in "wholesaling".