All Forum Posts by: Johnny Brown

Yeah lessons learned. Better now then later. Just thought I share some of the things you face in this world of RE. 

So Let me tell you about my week. I found a Multi-Family home on Craigslist for 179K. Rehab of 17k (previous work recently done)with a AVR of 213K. Contacted the seller to submit an offer of $150K simply because i seen that's what it was last listed on the MLS for before it was removed. Also Had a Buyer on my List that was looking for this type of property and was willing to buy as-is for 163k.

So when I Contacted the seller I found out they where a third party. They said they where going to wholesale the property for a fee. I said hey we can all make money no problem if you can get me the property for 150k. The Wholesaler said let me see if they will accept that offer. Wholesaler calls me back and said good news they accept you offer all they need to see is pof. 

So i get my bank statement online send it over and wait on the contract. I get the contract and it was okay No Emd all cash no loan. I had no problem with that because i was going to buy with my money and close the next day with my end buyer. 

I have my team do there due diligence on the property and we find out that there is a loan on the property. and a assignment of Rent to the lender. Still No problem in our eyes. So we get the contract and notice its between us and the actual home owner not the wholesaler. So we still sign and say make sure both owners sign the contract. because we also found out there is more then one owner on this property.  

I get a call from the wholesaler say well we can move forward with this deal if you want but we want a EMD Now. I said No that is not what i sign to and pull back my offer and found my end buyer another property.

I just want to say I am glad that i did cause now I see the house is going into foreclosure. I am still going to contact the owners and see if I can negotiate a deal with them. 

Just always due your research.  

so here is the out come for today. I went to put the house under contract and fumble the game plan. He said could I send the contract by email and was so lost. I did get my mother in law today to help me with this deal since she is a licensed agent.  When I did my research I found out you can do everything electronically.  But it okay because I am learn from my mistakes.  Just an update

Place ads and get signs and put them around your local neighborhood. I put them around distressed property's and homes that I see for sale by owner

I posted ads and put up signs in my local area near vacant homes and property's that looked distressed

Yes the seller did not ask for a pof. And I was thinking to wholesale the property.  Instead of a rehab. And we do paper work today at 2pm Pacific time. So this really has me excited but very nervous at the same time. We are meeting at the home today so I can inspect the inside of the sfh. To pro to it is a new roof was put on it last year the seller say. 

I just didn't know if I should have applied for the hml and the house was not under contract.  

Thanks for telling me. The only way you learn is by mistakes 

So I meet with a seller today after talking on the phone for about 2 days.

His asking price was $73,200

The comps in the area are between $120,000-$125,000 ARV

After talking on the phone I got him down to 56k 

Today we put the house under contract

Now I told him I was buying cash 

The thing is I have not talked to a hml yet 

Should I have done this before making that kind of offer. 

This is my first true deal. I took some time off to learn. This lead came from tons of signs I put up in my local area. 

Can someone please give some input. 

When should I seek hml or pl? Before or after searching for deals? 

@Chris Winterhalter I will take that and run with it and trust me before the deal is complete I will have a solid team that knows about the hotel world behind me.

Thanks for all the advice I will take in what I use and the rest well I will let someone else use. I have done some solo deals last year with apartments. And have a great return on them. This was brought to me so i checked the numbers and last 5 years of income on the hotel. This is a franchised hotel. I also have investors now so I want them to have something with worth. What was the most attractive was the fact it had a 23% cap ratio. I also see when the last group bought it the profits dropped tremendously. The reason i asked about the annually and monthly is because right now we planned to do a Dividend reinvestment plan of 5,10,15 years. We already have incorporated and have authorized 10,000,000 shares. We know with the reinvestment plan you don't see nothing back until the end. I wanted to also have some shares to people that what a monthly or annually return. So maybe some didn't understand but i already found out what I need to know.

As far as the bashing on here this is why a lot of people stop posting on here because this is a site for advice not for people to bash or try and tear someone down that have plans and goals in motion.

Thanks to everyone that gave great advice and if i would have know about that conference sooner surely would have went to network.

Okay so I have found a property for 13 million dollars this is a hotel and right now its noi is at 6.5M but it has a potential to have a noi of 152M. Just by that lets me know that business must be very slow or not ran right at all. So here is my plan I have some investors but plan on getting more involved but how would I pay my investors back monthly or annually? This would be our first deal as a group and I want us to go big. I came up with some numbers but I am scared we are going to have to form a reit because thats a lot of money. I was gone see if we could get the hotel for 10.5M. Like I know I want long term investors because we want to do a 15 year hold with or investment. But for something like this what would be a good percentage on the return?