All Forum Posts by: Stewart Beal

Hi Dan, many of the local banks in the Ann Arbor area offer 10 year terms, I recently did one with 3.6% interest rate, 10 year term, 20 year amortization.  Go to your local banks first and see what they have to offer you.  They are hungry for deals.

Get the deal under contract and then solicit investors, will only take 2 to 3 to raise $80,000.

The challenge with syndicating a deal you already own would be the investor thinking the valuation you are putting on it is too high, but there is nothing specifically stopping you from trying this and you really have nothing to lose besides the cost of hiring an attorney to put together the syndication paperwork for you.  And you can use that syndication legal work on your next deal if what you are trying doesn't work out   I am currently raising a fund and the legal work cost $30,000.  Keep in mind, raising money is a full time job, so you will need to hire someone to do what you are doing now or vice versa.

The key is finding a seller who can't sell their property for the price they want.  I have done about 20 deals like that where I buy on land contract and the seller finances all or most of the purchase price.  Here is one of my favorite stories about that.

The Power of Real Estate (and buying real estate for no money down): In 2013 the Midwest and Toledo OH were still mired in the foreclosure crises 5 years in. I had purchased a building in 2009 in the Old West End and I was standing outside when a man approached me saying he owned a 45 unit apartment building with a 30 car parking garage across the street that he wanted to sell to me. I told him that I couldn't buy anything else, I was out of cash having already purchased a lot, but what is the price. He said $500,000 which I thought was pretty good but I told him sorry I can't do it. 2 months later he found me outside again and said look, I have to sell, and you own the building across the street, you have to buy the building. I said ok, let me take a close look, give me the rent roll and the financials and let me tour the building. His rent roll said that there were 24 occupied units and 21 vacant units but when I toured I discovered that only 6 units were occupied and there were 39 vacant units, his property manager had been lying to him. I said look, I will buy this building, I will pay $325,000, I will pay you $0 down on a land contract where you lend me the entire $325,000 at 5% interest for 5 years on a 20 year amortization. He was so shocked and depressed to be told he only had 6 occupied apartments that he agreed! I bought a 45 unit apartment complex with a 30 car underground garage for $0 down. The next day I went to the building to get to work and found a man removing every single appliance from the building, I was like what on earth and the man said these appliances are mine, the seller didn't pay me for a bunch of work I did, so I went back to the seller and got him to pay me $10,000 for the appliances (they were basically trash anyway) so it ended up being the seller paid me $10,000 to buy his building. We went to work, under all the carpet we found 100 year old refinishable hardwood floor that looked amazing after a quick sand and poly. We renewed leases with the 6 remaining residents (4 still live in the building today). 6 months later we had turned every apartment, leased them all, and had the building stabilized. 5 years later we had paid down the land contract a lot, got an appraisal for $1,800,000 and did a large cash out refinance allowing us to purchase 4 additional apartment buildings.

Hi Michael, I started my first business when I was 13, a lawn care company, by the time I was 19 I had 400 customers and sold the business for $250,000 to my partner, I got $50,000 on the date of sale and about $1,500 a month for 10 years.  I used that $50,000 to invest in a 5 unit apartment building and the rest is history so they say.   What I did in my teens is I read every single business magazine published every single month cover to cover, Fortune, Forbes, Inc, Fast Company, Barrons, so literally tens of thousands of business articles over many years.  I also read about 20 books on real estate investing and I networked and built a team of mentors.

What are your interests?  What are you good at?  What are you looking to do?

I would recommend 10% of the purchase price if the property is in good shape and you do not anticipate having to do major work in the short term.  If you know it needs work, than budget for that work + 10% of the purchase price.

You can form an LLC yourself, or using Legal Zoom or any other website like that, but I would recommend getting to know an attorney either way, it is always a good idea to have a good attorney on your team.

Hi Christopher, when I was 19 I purchased a 5 unit, investing $50,000 I had saved, and borrowing $212,000 to get to the purchase price of $262,000.  I bought it because 4 units were occupied and 1 was vacant, I house hacked of sorts moving into the 5th unit while I renovated it.  But yes, you need to get a commercial mortgage for 5 units or more.

The Power of Real Estate (and buying real estate for no money down): In 2013 the Midwest and Toledo OH were still mired in the foreclosure crises 5 years in. I had purchased a building in 2009 in the Old West End and I was standing outside when a man approached me saying he owned a 45 unit apartment building with a 30 car parking garage across the street that he wanted to sell to me. I told him that I couldn't buy anything else, I was out of cash having already purchased a lot, but what is the price. He said $500,000 which I thought was pretty good but I told him sorry I can't do it. 2 months later he found me outside again and said look, I have to sell, and you own the building across the street, you have to buy the building. I said ok, let me take a close look, give me the rent roll and the financials and let me tour the building. His rent roll said that there were 24 occupied units and 21 vacant units but when I toured I discovered that only 6 units were occupied and there were 39 vacant units, his property manager had been lying to him. I said look, I will buy this building, I will pay $325,000, I will pay you $0 down on a land contract where you lend me the entire $325,000 at 5% interest for 5 years on a 20 year amortization. He was so shocked and depressed to be told he only had 6 occupied apartments that he agreed! I bought a 45 unit apartment complex with a 30 car underground garage for $0 down. The next day I went to the building to get to work and found a man removing every single appliance from the building, I was like what on earth and the man said these appliances are mine, the seller didn't pay me for a bunch of work I did, so I went back to the seller and got him to pay me $10,000 for the appliances (they were basically trash anyway) so it ended up being the seller paid me $10,000 to buy his building. We went to work, under all the carpet we found 100 year old refinishable hardwood floor that looked amazing after a quick sand and poly. We renewed leases with the 6 remaining residents (4 still live in the building today). 6 months later we had turned every apartment, leased them all, and had the building stabilized. 5 years later we had paid down the land contract a lot, got an appraisal for $1,800,000 and did a large cash out refinance allowing us to purchase 4 additional apartment buildings

@Caleb Campbell I would avoid hard money like the plague, only have done it once, paid 9.75% interest.  If you are credit worthy, obtain traditional financing.