All Forum Posts by: Ryan Pemberton

I've been in a partnership for about 4 years. Long story short, These two guys were the capital people and I was the boots on the ground/grunt worker, and I found the deals and managed the rehabs. So our operating agreement put me at 20% to each of their 40%. There is an operating agreement in place but the buyout section is vague. We have since refinanced with a bank loan in the LLC, of which I'm 20% responsible. The properties are managed and make good returns. We take small distributions monthly and keep a comfortable savings account for any emergencies. These guys were born into money and have enough cash on hand to buy out a descent portfolio and just earn better returns without me in the picture. They sent me two different options to buy out. One was asset based, which was basically my 20% ownership, and one was EBITDA, which was my potential earnings for 5 years. It seems to me like I'm selling both of these figures and the number should be a combination of both, not either/or. Am I out of line here? Also, EBITDA stands for earnings before insurance, tax, depreciation and amortization. The number they sent was AFTER insurance, depreciation, tax, and amortization was deducted. I'm out of my element and really need some advice from someone who has traveled this road. As always, I appreciate it.

I'll vouch for Josh and ERS. I'm about as hands off as I could be. We've been through some pretty heavy storm damage with insurance claims, plumbing leaks, issues with the city, the whole nine, and have always been taken care of fairly and quickly.  I'm satisfied.  Maintenance costs are reasonable. Josh always keeps me abreast of what's important. He keeps my units rented by qualified tenants which helps on our occasional turnover cost. I can run property ideas by him and he'll tell me straight up if it's a good idea or not. He has a very strong insight on the Evansville market. I've heard some horror stories from other people dealing with other property managers in Evansville, mainly with maintnenace costs, and have yet to experience any of those nightmares myself. ERS doesn't gouge their investors like some do.  I can't really say anything negative about Josh and his team. 

@Nicollette Roth  I'm actually from Newburgh (a neighboring town) and have several rental properties in Evansville.  I'm working on one this evening.  I'll PM you my phone number.  Feel free to call me and I'll tell you as much as I know.  

@Brian Derry please inbox me details of the properties in Evansville. 

I can't tag you on mobile.  Hope you see this!

Hey, @Sean Hughes.

Welcome.  I'm from Newburgh, IN and have a little experience but I'm always trying to build my network. If you want to inbox me, maybe we can meet for lunch one day and talk shop. 

 The whitewashed brick looks amazing!  Love it!  I'm definitely gonna try this out!  Thanks for the tip!

I really like the Behr color Sculptor Clay with cedar.  It's not completely white but goes well with the reddish tinge that cedar has.  You can also probably sand that cedar and stain it with something really light.  OR maybe sand it bare and do a whitewash type finish in lieu of sheet rock over the top.  If you're cool with the rustic look, it may give it sort of a ship-lap feel.  I agree the cedar ages it but I feel like you'll eventually regret covering it with sheet rock.  Kinda like when we rehabbers find hardwood under carpet!  It hurts the soul a little!

-side note:  If it's a functioning fireplace, painting it may create a bigger headache than it's worth.

I'm subscribing to this forum to see what kind of replies you get, @Jared Kulp. I've wondered the same thing. I had an almost unbelievable deal get away because it was listed as cash only and it sold on auction...and was listed on the MLS. I was not in a position to make a cash buy but the house would've been a cash COW had I been able to snag it. The listing agent was not helpful and often responded with one word answers to my inquiries. Probably because he thought I wasn't legit without $40k cash ready to go.

Hopefully someone with some wisdom will chime in!

Be prepared to walk away.   Sometimes deals just don't work out.  If you have to walk, be sure to end on good terms and let them know to contact you if they change their mind.  More often than not, people come back around when they can't find anyone to buy their train wreck from them.

To help coax them, let them know what kind of values comparable homes in the area are selling at and how much new construction, foundation repair, or demolition costs are.  Once those numbers are in black and white, it's going to be hard for them to turn away any money at all.  Also, see if you can find a nearby vacant lot for sale and throw in that number.  If the house truly has to be razed, it's in their best interest to take whatever they can get and be rid of the problem. 

Good luck with your negotiations and don't forget to be okay with walking away.  More deals will surface!

-Ryan

Thanks for sharing, @Bill S. .   I think humbling stories like these are VERY important for us all to hear.  It's not always a glamorous road.