All Forum Posts by: Roger Poulin

I am a web developer by day, and RE investor on nights and weekends.  Search optimization is an art unto itself.  You need to try some web and search forums.  The best solution is Google's Adworks, and that will take some trial and error.  But that is probably not what you wanted to hear.  

@Lelith Walker, those requirements seem really high. Have you found any that meet that? Whit 15% COC, I think I could raise considerable funds at my local REIA.

I am wanting to break into commercial and Multi-family seams like a good place to start. I would like to hear from some of the people that have attended recently what they think. I have read 3 of his books and done his at home course from a a couple years ago. Here are some of my questions: 

1. Is David really still doing it himself.  Seams odd to have a gazillionare take 3 days to educate us peons.
2. Is there material in the live course that is not in the material.
3. is Dave offering to help fund deals with private money he as raised?
   1. If yes, what are the parameters that the deal must meet? I  fear an impossible expectation.
   2. Also what is the cost of the money?  Would I be better getting payday loan to cover my purchase?
   3. Does this private money assistance come with the course, or do I need to join the Gold Club, or some similar upgrade.

I have  bought several Kits, Courses, and programs. Many of them good, but some were worthless. While I could use some help to get a commercial portfolio going, I don't consider myself a newb.  I just want to invest my time and money wisely.

Thanks

I am looking to do a wrap around mortgage in Jackson, TN. Can anyone recommend a good RE lawyer to help with that??  

You should be able to get one  dup with 3.5% down if you have decent credit.

Greg speaks the truth, and has good suggestions.  Multiplex is often a good way to start because you can live in one and rent out the other 1-3 units. They pay most or all of the mortgage and you live for free, plus the tax benefits stack up in your favor.  BP has several articles on "house hacking" so you can learn more. 

Don't be to fast finding a coach. Start with the reading and podcasts, go to some REIA meetings. Shake many hands and introduce yourself to everyone. Try to figure out who are the real investors vs the posers. Find out who has a good heart vs a shark. Build a relationship with a few key people. When you do approach them about coaching, start by offering to assist them in their next project. Try to offer them something first instead of looking to take. You will gain good experience and strengthen a key relationship at the same time.

@Derek Priceundefined

@Thomas S.undefined

If you make any big moves before closing on your personal home, you will put it in jeopardy.  I suggest you don't do that.  the house purchase is going to drop your credit score for serveral months afterward. so you will be limited on what you can do.

Here is what you can do for the next few months, EDUCATION and NETWORKING.  A great place to start, for free, is bigger pockets. read articles, listen to webcasts, surf the forums. learn all that you can, so when you take action you will have confidence you are doing the right thing.  Also find a way to meet other vestors. In time they will be your main supplers and purchasers of deals.  try out a real estate investor club in your area like Knox REIA or you can try out Tri Cities REIA.

Two topics you should explore first is "wholesaling" and "bird dogging".  Both allow to get started with none of your own money and let you create a network that you will use for a long time. when starting stay away from the training classes that are offered for anywhere from $500 to $20,000.  Most of these are snake oil salesmen.  Find a good coach or mentor that knows your area, and intern for them ( do the leg work). This can be very educational.

Don't get stuck in the education phase.  At some point you need to take action.  You will never find a risk free deal.  You will find a way to recognize those risks and manage them. Make an informed decision and take action.

I did own a online payday loan company, but I am not a lawyer.  Based on my experience, I would say yes.  You go though the department of commerce and insurance.  If you are a Tennessee corporation it is very easy.

I did own a online payday loan company, but I am not a lawyer.  Based on my experience, I would say yes.  You go though the department of commerce and insurance.  If you are a Tennessee corporation it is very easy.

@Kelton Johnson the multi family market has grown very tight in most of the country.  All that @David Light pointed out is correct. Please don't think I am raining on your parade, but thorough analysis is needed before you spend 800K. I have a couple more questions, then a suggestion.

1. What do you base 8% vacancy on (Performance of this property, local average, regional MLS statisic)? Generally you want to go a little pessimistic on your projections, this will make it easier to out perform projections and keep investors happy. Typical is 10%.
2. What is 1% appreciation based upon?  Commercial property is priced based upon the cash flow.  It does not go up in value unless the profitability goes up.  Do you have a plan to do that.  What direction are rents headed in your area?
3. Are utilities billed direct to the tenant?
4. It sounds like you want to be the manager.  That is great. do you have experience in screening tenants? Have you ever evicted a single mom with a  baby on her hip? Do you know what to do if a washer overflows at 1 am on a Saturday morning? It is not a job for the faint at heart.  What compensation do you expect for that service? Put it in the spreadsheet.

If you are not scared yet, good. I suggest you revise your calcs to show an all cash scenario, and show the project P&L today, and a reasonable projection for 5 years. Then create another tab, to show 75% financing at 4.5% (again showing today vs 5 years). Show the COC both ways today and in 5 years.

If you can come up with a scenario where you can offer at least 12% return to your investors (15% is even better) and still make something for yourself, move forward. Send the seller a Letter of Interest (LOI) with the terms and price you want. The LOI is a negotiating tool that may go back and forth several times to reach an agreement. Once everything is agreed upon, translate it into a contract with a 30 day due diligence period.

One common strategy is to offer 2 or 3 LOIs to see which one the seller is most agreeable to. One may offer him 80% of his asking price paid in full at closing. The second may offer full price, but paid 20% at closing, then he carries a note that balloons in 5 years (make him your banker).  The Third may be a Master Lease Option, where you offer to lease all 8 units for $7200 (8*$900) per month for 4 years and assume the management, then buy it for today's asking price (if it works out). There are other options also.

When you have the deal under contract re-post on BP your spreadsheet with hard numbers (and send a copy to me).  If you can offer good returns and have a sold plan, the money will come.