All Forum Posts by: Steve Sidie

It looks like it all boils down to either selling it (cash or terms) or finding a cash partner. 
Thank you @ALL for your inputs. I appreciate it.

Quote from @Steve Vaughan:

@Engelo Rumora and Michael P are a couple large players in Toledo worth talking to about an equity sharing deal or possible alternatives.    They know that market and have tons of experience. 

Hello and Thank you Steve, I appreciate it. I will reach out to them.
By the way is it Michael P Zembower? 
Thanks again. 

Quote from @Eliott Elias:

Find an private money partner to finish the project with if it is still a good deal once you finish it out. Can you refinance right now?

 HI Elliot, yes it would be ideal to find a money partner to finish and hold it together. I can't refinance right now (see my previous response to Chris) 

Quote from @Chris Seveney:

@Steve Sidie

Lots of other questions asked that can play a roll in what to do.

What is the ARV of property if other units were renovated?

What type of area is this in -A,B,C class?

How much is owed versus how much is it worth

Have you had a conversation with the bank to short sell the property?

Is the property professionally managed?

These also will help in assisting on what you can do

 Hello Chris and thanks for your questions. I will try to answer to my best knowledge along wiht other questions asked by others:
- ARV: not sure because there are really no comps in the area. I have spoke to some local agents and there are not much data to use.
- Class: C class area. There are plenty of development in the area so it is said to gain much value within the next years (hence I wanted to keep long term)
- Owe vs worth: I owe about $315k and as-is value would be less (maybe $240-260k, not sure)
- The bank is the HM lender right now and we have not discussed short sale. Or do you mean another bank?
- It has been professionally (mis)managed for the most part and I have been through several PM. This is part of the rough ride I mentioned. 

Other info: 
- property is owned by a LLC,
- the 3 rehabbed units are vacant due to some minor (but not so cheap) things remaining;
based on previous quotes I think $80-100k would suffice to complete the project. I know this can change but that is a good starting range.
- Estimated (conservative) potential income of $6k/month to start when fully occupied
- possible additional income from laundry, storage and even by adding a small studios in basements
- I can't refinance right now because of the numbers above; it would require me to bring a LOT of cash to closing which I do not have.

I hope this overview helps more and that I am not forgetting anything. 

Quote from @Account Closed:

Quote from @Steve Sidie:

Hello BP Community, 

I have a quick question and would like to get views from other people. 
I have a property that I purchased with HM loan a couple years ago that needed rehab. My strategy was to BRRRR however it has bee a rough ride since I purchased it. I have ran into more issues than expected. I rehabbed 3/8 units throughout this time and even got overcharged. 5 units remained to be rehabbed.

Despite the fact that this property has a good income potential when fully rehabbed today I owe more than it might actually sell for. I have lost money on this and the only way for me to make that loss back up would be to hold it long term (as I initially wanted) but I can't get a loan right now as it is. Hence I am also open to sell it and move on. 

So what would you do in my situation? Any suggestions, idea, advices would be welcome. 

Thanks for reading. 

Everything is negotiable. If you care to, you can have a cup of coffee with your lender and tell him your circumstance. Your approach is something like this

" I want to finish this project and make all of my payments on time. However, the market has changed and it looks like the property can't even be sold for the amount owing and the payments are way too high. I'm left with two choices, 1. default and you can have the property as it is or 2. we rework the payments so they make sense with this new market. I'm open to either solution and I'd like your input on how you want us to get out of this situation".

Use the words "we" & "us" . It's his problem too. He just wants to get paid and he sure doesn't want a half finished project. He may provide a solution that works for you.

The lender is aware because I have always been transparent with him. He has been asking around also to try to find someone so he can get out. 
I appreciate your input and will use that wording for sure next time I have a sync up with him. 

Quote from @James Hamling:

@Steve Sidie One other possible idea would be to sell the property on terms. Make sure to check your HML contract to make sure you can but assuming you can, with a terms sale (C4D) you could reach for a higher sale price, to cover those transactional fee's, and mitigate down any losses or spread them out over a time-frame that works.

This is why I advise everyone to put HML as a plan Z, the absolute LAST resort and to only consider once everything else has been exhausted AND with EXTENSIVE consideration to assure, without a doubt, it will be very short-term and is ONLY a temporary bridge-financing. Because getting stuck in HML for any length of time, you become a slave to the bank.

You could also look for a partner to give equity to in exchange for their investment to rapidly complete the project to then convert it. Not ideal, could cut your profit potential down a lot, but it's better then a default. 

Maybe a GC who's had interest in REI put not jumped in yet, because the renovations is a much cheaper easier thing for them to complete lowering that remaining capital requirement.

Thanks. 

This HM loan was initially just for short term; unfortunately in my situation that was the only way and it was right before COVID hit; which we all know caused a LOT of delays and cost increases.  

I agree with the GC idea to jump in or anyone else in exchange of equity; though the thing is find one that's interested. 

Hello BP Community,

I have a quick question and would like to get views from other people.

I have a property that I purchased with HM loan a couple years ago that needed rehab. My strategy was to BRRRR however it has bee a rough ride since I purchased it. I have ran into more issues than expected. I rehabbed 3/8 units throughout this time and even got overcharged. 5 units remained to be rehabbed.

Despite the fact that this property has a good income potential when fully rehabbed today I owe more than it might actually sell for. I have lost money on this and the only way for me to make that loss back up would be to hold it long term (as I initially wanted) but I can't get a loan right now as it is. Hence I am also open to sell it and move on.

So what would you do in my situation? Any suggestions, idea, advices would be welcome.

Thanks for reading.

Hello BP Community, 

I have a quick question and would like to get views from other people. 
I have a property that I purchased with HM loan a couple years ago that needed rehab. My strategy was to BRRRR however it has bee a rough ride since I purchased it. I have ran into more issues than expected. I rehabbed 3/8 units throughout this time and even got overcharged. 5 units remained to be rehabbed.

Despite the fact that this property has a good income potential when fully rehabbed today I owe more than it might actually sell for. I have lost money on this and the only way for me to make that loss back up would be to hold it long term (as I initially wanted) but I can't get a loan right now as it is. Hence I am also open to sell it and move on. 

So what would you do in my situation? Any suggestions, idea, advices would be welcome. 

Thanks for reading.