All Forum Posts by: Sean Gummer

I am exploring the option of becoming a correspondent lender for one of a variety of companies that operate their table funding business with these correspondent lenders.  I am currently a commercial lender with a few years of experience.  What peaks my interest with this is that it appears to be a great way to access capital.  In my personal rental property portfolio the biggest struggle I have is finding the capital I need.  These correspondents seem to bridge the gap between private equity and institutional lending.

My ask to everyone here is this; has anyone done this?  I am very curious to hear about some hands on experience with the process.

Thanks!

Where is this place at? Impressive you can find a three plex in Montana. I am not doubting you, just curious. I am in Great Falls, which I would say is relatively cheap. Any given three plex is $200k or more to start.

Christopher Phillips each unit is individually metered which is paid for by the tenant. I will factor repairs and capex into my model. Thanks.

Here are the numbers I am using. Purchase price of $699,000, 25% down ($174,750), 5.25% on a 30 year note (found a bank that will jump up to 30 years). Annual taxes are $5502 and I have an insurance quote of about $2000. P/I + Escrow comes to $3500. Gross rental income is $6818 as posted by the current management company. $6818 - $3500 = $3318. I put in a 5% vacancy rate, bringing my estimated monthly net income to $2978. My partner and I will have $20k in an account for repairs, therefor there will be no additional expenses. My model has a cap rate of 9.14% at this point. I can't see anywhere that I am too far off, but judging by what folks are saying here I am missing something. So, what am I missing? Thanks again for all the input.

This is a last minute partnership idea. We need to get the LLC and other agreements in place. We are ok with making that work in due time. We really just want to get the offer in. I will cash flow nice. It's a $700M building. I am assuming 25% down, 5% rate on a 20 year note. It currently rents at 95%+ occupancy and brings in $6818 monthly for all units. Should cash flow nice at ~$3,000 per month post P/I and escrow.

Hey everyone - An opportunity has presented itself to potentially purchase a 12 unit apartment complex. It is two 6 unit buildings. It looks like I will be able to partner up with a friend and get the down payment together between the two of us with capital from an outside investor. My question is what advice do you have in making a run at commercial properties? I have a bank that is willing to lend, but what steps should I take to help that process along? Are there any certain legal steps I should take in this process? There is an offer on this property, but that is pending the sale of a large property. If we can get our ducks in a row quick I think we will have a good shot at it. Any information is helpful, it's a step in a new direction. Thank you!

Joe Fairless has a great podcast too. Short episodes packed with great information.

Thanks.  I wanted to have one result answers.  I know there are multiple reasons that tenants like a property.  I just want to see what the top answer is before digging into things a little more.  

I have put together a survey to see what it is people look for in a rental home.  This survey applies to renters and homeowners.  The goal is to see what items people look for in a home.  If you are willing to take a quick survey, that would be a huge help for me. It takes less than a minute.  I really appreciate the assistance and information.

https://www.surveymonkey.com/r/MVDSM8C

End state is that I would like to see what drives a rental and what to focus on.  I am more than happy to share the results when I get a good sample population.

Hello everyone, this is my first post in BP, hopefully I can get to the point quick. 

I have built a model that represents my plan in raising capital to purchase a four plex.  With this I have an amortization table coupled with rental income data.  My question is whether my idea is worth pursuing or not.  I would like to raise capital, 25% of purchase price, and guarantee a total rate of return for the private lender of 9.5% over the life of the deal.  

To achieve this return I have built in that 40% of net rental income and 65% of the profit from the sale of the four plex will be returned to the investor.  The summation of this is equal to the future value of their funds at 9.5% for 5 years.  Additionally, would it be better to pay a monthly, quarterly or annual dividend to the investor or to pay one lump sum at the end of the relationship?

While I would not be exposed to this deal in form of cash, I have drafted a plan stating that there will be a "savings account" which will be a line of credit from a single family rental of mine which is currently at ~70% LTV. With the model I feel I have made assumptions on the weak side and that the true payout would be closer to 12% for the investor.

Before I try raising capital and pursuing the plan I would like to see what folks in this world think of the idea.  I don't know if many people do the mix of rental income and real estate appreciation to determine a payout.  Thank you for looking over this, I appreciate any and all advice.