All Forum Posts by: Shannon Webb

Ok guys! I am just going to be straight forward and would love it if you could tell me if this is possible:

I am looking to sign a master lease with a seller, (if he agrees) at 3000.00 a month. There are 8 properties in total and currently 5 of them are renting out for at least 550.00 a month (2750+). One of the properties is worth 975.00 a month in rent and was recently vacated in January due job relocation. The house is beautiful. The seller doesn't doesn't want to rent it out as of now because he is looking to exit REI altogether, which is where I come in. I want to take over these properties and make this situation a win win for both of us, especially due to the idea that his numbers for buying the properties outright are outside of anything an investor would want to pay.

So here is my question:

I want to be able to offer him a down payment in the amount of 3000 and have 2000 put up, in case of emergencies to begin with. All in all, that is 5000.00 that I would be asking a lender for. My credit is not good, and at the current time, I am struggling to make ends meet in my own household. BUT the money for the loan is there, even at 13% interest! I am totally prepared to take this on, while I continue to wholesale, but I need to know, WOULD ANYONE be willing to loan to someone like me with this type of opportunity in front of them?

I'm going to meet with my seller in the morning so I would love to know if this is possible.

Thank you so much in advanced!

@William Hochstedler

Thank you so much! I'm devising my plan now! 

I think this is how I will walk into Waffle House tomorrow:

This is my offer and can not deviate from it much due to the numbers not working in my favor as an investor. However I still want to place this number on paper so you can always be reminded that it is there.

I am still very interested in your properties and being that we never know where time will leave us, I would be foolish not to bring up this last offer, which I believe will benefit us both tremendously.

Currently you are making 30,000 off of rents due to not having tenants in the two houses. What if i propose to you that for that same 30,000 a year or 2500 a month I sign a master lease with you, relinquishing all property management to me, including the rights to screen and place tenants and you would only have to deal with me. The rent is already there, as you are very well aware of, so the risk is very minimal. At the end of the lease, you will have the option, to either renew the lease, or if a deal is made, sell the properties. either way, you will no longer have to manage the properties, and will now have the time and freedom that you have been waiting for. My profit margin aligns with that of a management company and with this lease, I will have more time to get to know the tenants. Also with me being in town, You will have a direct link to what's going on at a moment's notice. This is a win win for both of us!

@Tim Watts 

I am scheduled to meet with him again tomorrow morning, and will give him my offer on the properties. Mind you, this will be solely for wholesaling purposes so I will need it at a dramatically reduced rate than for what he is proposing. Outside of my figures, the deal is just not profitable for me.

The guy is just ready to "retire" and so just from talking to him and his wife, they seem very motivated to sell.

I'm really interested however in whether or not there is another way to even acquire these properties for myself, in my current position. I'm thinking its an extremely long shot, but you can never say never right?

They are leaving to go back out of town Friday, so the sooner I have all my ducks in a row, the better, you know?

@Mark Gallagherand @Tim Watts

Thanks so much guys for responding!

My main issue with his numbers is that with whatever exit strategy I decide to go with, it doesn't seem to work in my favor. If I bought even one house, with the improvements that are recommended to get top dollar, It would put me in the red if I did decide to sell. Same thing with the condos. For this reason alone I am willing to walk away from the table without a deal.

I am new in REI and would love to be able to say I could get these properties, but without experience, there is no way I could get money from even a hard money lender. I am perfectly prepared to get transactional funding for deals when it comes to wholesaling properties, but outside of that, I'm not sure what other options I would have.

With that being said, I really want to understand what @William Hochstedler is proposing. What is this you speak of when you mention a master lease and next to nothing down, on this portfolio. If I could get in with this seller, it would be amazing, so if I can propose an offer to him that would put me in the door with REI another way, I would love to know it.

I plan to meet with him in the morning with my offer, so if you have time to respond as soon as possible, it would be greatly appreciated.

I've posted this else where, but i'm really looking for assistance! Thanks in advanced!

So, today I went to go and take a look at some properties today, 8 in total, all from the same seller. This guy is an older gentleman and is looking to get out of owning properties. He expressed how he want to spend the rest of his time here on this earth with his family and I totally understand.

Of the 8 properties, 2 were houses, and the other 6 were condos. The houses were in great shape. He could rent either one of them out today, he just prefers not to. (his rent was 950-1000) My contractor and saw improvements that should be made to take both homes to their top potential and get the maximum ARV. Together (for both houses), the total rehabbing would be 23,000. this includes roofing, painting, pressure washing, electrical, floors, bathroom re-vamps, landscaping, ceiling work, doors, fixtures. the 9! Not a lot of work NEEDS to be done, but for top dollar, it should be.

The other 6 condos are in good condition too, and most of the units have active tenants in them. The seller says he NETs 30,000/yr just from these properties. Once again not a lot of work needs to be done, but should be.

With that being said, he is a Buy and hold investor and I know what he brought the properties for. I also understand that he would want to make a profit off of what he has placed into the properties. HOWEVER you would think that because I am coming to him as an investor myself, that he would offer me a price CLOSE to an investors deal....

he wants.... DUN DA DA DUN.... *drum roll*

500k for the lot of all 8!

Here is where my brain is doing circles:

I've looked up the suggested Value (not the value that the house is taxed at) according to the tax assessors office and each house is at 89,900, give or take a little. And the condos are at 29,500 each. All in all that is 356,800! Don't get me wrong, once the improvements are made to the houses we believe we can get 125,000 for both houses. There are no improvements to be made that will add enough value to where purchasing it at 300k makes any sense.

So Now I'm down to what I am willing to offer the seller. I would love to say 70% of 356,800 which will be 249,760, which WE ALL KNOW that wont fly. But what would be my negotiating points so that the seller understands my position and doesn't feel I am trying to take advantage of him?

Also I'm trying to understand if the buy and hold model for investors uses a different formula than if I was to flip the houses. such as if I buy at 300,000 and the net income is 30,000 a year, does the 10% a year against the purchase price solidify the deal?

Please help me!

Your newest wholesaler,

Shannon Webb

I just want to bump this one time! :) Sorry...

@Brent Fleeman

Thank you. I was really thinking that the better shape the property was in, the better. but from here on out, I would look into more distressed properties! Come across some better deals!

So, today I went to go and take a look at some properties today, 8 in total, all from the same seller. This guy is an older gentleman and is looking to get out of owning properties. He expressed how he want to spend the rest of his time here on this earth with his family and I totally understand.

Of the 8 properties, 2 were houses, and the other 6 were condos. The houses were in great shape. He could rent either one of them out today, he just prefers not to. (his rent was 950-1000) My contractor and saw improvements that should be made to take both homes to their top potential and get the maximum ARV. Together (for both houses), the total rehabbing would be 23,000. this includes roofing, painting, pressure washing, electrical, floors, bathroom re-vamps, landscaping, ceiling work, doors, fixtures. the 9! Not a lot of work NEEDS to be done, but for top dollar, it should be.

The other 6 condos are in good condition too, and most of the units have active tenants in them. The seller says he NETs 30,000/yr just from these properties. Once again not a lot of work needs to be done, but should be.

With that being said, he is a Buy and hold investor and I know what he brought the properties for. I also understand that he would want to make a profit off of what he has placed into the properties. HOWEVER you would think that because I am coming to him as an investor myself, that he would offer me a price CLOSE to an investors deal.... 

he wants.... DUN DA DA DUN.... *drum roll*

500k for the lot of all 8!

Here is where my brain is doing circles:

I've looked up the suggested Value (not the value that the house is taxed at) according to the tax assessors office and each house is at 89,900, give or take a little. And the condos are at 29,500 each. All in all that is 356,800! Don't get me wrong, once the improvements are made to the houses we believe we can get 125,000 for both houses. There are no improvements to be made that will add enough value to where purchasing it at 300k makes any sense.

So Now I'm down to what I am willing to offer the seller. I would love to say 70% of 356,800 which will be 249,760, which WE ALL KNOW that wont fly. But what would be my negotiating points so that the seller understands my position and doesn't feel I am trying to take advantage of him?

Also I'm trying to understand if the buy and hold model for investors uses a different formula than if I was to flip the houses. such as if I buy at 300,000 and the net income is 30,000 a year, does the 10% a year against the purchase price solidify the deal?

Please help me!

Your newest wholesaler, 

Shannon Webb

@Jeff S.

thanks for replying! i will totally consider it! more properties to look at now! thanks!

@Steve Vaughan

The name of the game is branding and I want to give my investors something to respect. So as I walk out her into this world I'm taking my time to be diligent and efficient. I don't want to make a habit of finding any old properties to show investors because I want them to take me seriously. That's why I asking these questions because once i hit an investor's email with a property under contract, I want them to be excited to hear from me!

While it is important to make sure the seller is happy with what I offer them, I believe its even more important to please the investors, and so here I am! lol