All Forum Posts by: Stephen Hollenberg

I'm with @Allan Smith on this one. You sound so far behind the 8 ball that it feels extremely unprofessional. You knowingly signed a contract with a sizeable down payment that you do not possess the ability to pay. Keep in mind that on the other side of that contract is a seller that is making plans which involve you actually doing what you promised.

Your best options might be to wholesale it, or call the seller tomorrow and let them know you can't do what you signed up to do.

Don't be so dramatic. It is totally fine, professional, and industry standard to use your due diligence window to get your ducks in a row. That can be inspect the property, scope the sewers, visit with your contractor, visit with your architect, and/or arrange your financing.

When I see posts like this I see folks that haven't been on the seller side of a bad deal. You are messing with other people's money, have your stuff together not a prayer that you will find money.

Point taken but if you put an offer on a property because based on your initial review it looks like a good fit, I don't see this as messing with other peoples money.

Not to be harsh but I don't care about the sellers emotions when I'm doing a deal. This is business. If they accept my offer and we enter a contract, I will adhere to that contract by doing due diligence during my due diligence window, and back out of the deal in the event the property doesn't meet my expectations, etc. And in the case of the original poster on this thread, arranging funding is a fine part of due diligence, in my opinion.

(I should note that I have never personally had issues finding funding, and I've never backed out of a contract due to inability to fund the deal. I have backed out because of issues that came up with the inspection, negative external factors, detrimental comps showing up, etc. But if you have a good deal, finding funding for that deal is the easy part)

I wish finding the funds was as easy for me! By all accounts it seems like a great deal....I've run the numbers so many times using conservative figures and it continues to return a positive cash flow at 100% financed. Just need to find the cash!

1 Vote

Manchester, New Hampshire

Quote from @Jeff Hudak:

@Stephen Hollenberg look for private Money from friends or family. @ 6% would be tough. At that price you will have to give up some equity. 10-12% would be more realistic

Thanks for the suggestion. It does cash flow at closing with up to 8% on the $245k down payment. Higher than that and it would be negative cash flow until I can renovate the currently vacant unit.

1 Vote

Manchester, New Hampshire

Quote from @Scott E.:

Quote from @Allan Smith:

A lot of red flags here. $400 in cash flow for a 700k building is not good. Contracting a property with no where to turn for money except a vast land of real estate forums is not a great sign. 6% is a terrible return, it's less than inflation.

this is a tough one. Best thing to do is start calling everyone you know with money and ask if they've ever considered a passive investment in real estate.

There are no red flags in his post. You must not have caught that he said it would cash flow $400 per month IF he got into a 100% financed situation where he borrows the remaining $245k at 6%, and that after rent increases it will cash flow over $2k per month (again in a 100% financed situation).

I'm not here to underwrite the deal because I don't know New Hampshire, but I will say that if OP's numbers are correct, this is a home run of a deal.

Thank you for this vote of confidence! Yes, it cash flows at 100% financing which is crazy to me and seems like a no brainer.

2 Votes

Manchester, New Hampshire

Just a different way of doing things. I've got a property worth nearly $1 million under contract with seller financing that will cash flow more than $2000 per month in the first year and all I need to do is find some place to borrow the money from. Was hoping for creative ideas on here....business loan? Lines of credit? Etc.

5 Votes

Manchester, New Hampshire

I'm under contract to buy a 6 unit, mixed-use property with seller financing. The seller will provide $700,000 of the $945,000 required. They are giving me 45 days to show proof of funds for the $245,000 so I need to find it!

-I can't take any more loans from my 401k.

-I have 3 properties right now:
-Property A, worth $400,000, is currently financed at around 72% with potential to pull out $31,000 to get to 80%.
-Property B, worth $500,000, is currently in the process of being refinanced at 80% to pull money out to buy a separate property.
-Property C, worth $600,000, is my primary residence currently financed at 86% with potential for a HELOC to pull out $23,000.

If I can find $245,000 at 6% the property will still cash flow $400 per month at closing after all expenses, 5% vacancy, and 5% toward repairs. With potential rent increases and filling a currently vacant unit, it will cash flow over $2000 even fully financed.

Any help in where I should look would be appreciated!

4 Votes

Manchester, New Hampshire

@Cory Iannacone How do you do a mailing campaign? I'm trying to find another property but everything sells so fast and I'd love to find a place off the MLS. I think I'm gonna have a lot harder time than you though since properties around here are all at least twice what you were paying and doing cash out refinances aren't going to provide me enough funds for a downpayment like yours did.

0 Votes

All Forum Posts by: Stephen Hollenberg

Stephen Hollenberg has started 1 posts and replied 6 times.

Post: Where can I find $250,000 for a down payment?

Post: Where can I find $250,000 for a down payment?

Post: Where can I find $250,000 for a down payment?

Post: Where can I find $250,000 for a down payment?

Post: Where can I find $250,000 for a down payment?

Post: From 2 to 18 Units ($1M+ in Real Estate) In 12 Months Using OPM