All Forum Posts by: Dawn Roof

@Michael H. Any update? Did you get these duplexes under contract? 

Thanks for all of the great info everyone has posted so far. My question is, couldn't this type of funding work with the BRRR strategy? Buy with the line of credit, rehab with the line of credit, rent it out, and then go get a conventional loan that would pay off the credit debt??? OH WAIT. There's the problem right there. I'm guessing you actually COULDN'T get a conventional loan, because now your credit is shot to hell from having $120,000 worth of credit card debt. Sound about right? Did I miss something? Any way this would actually work??? I'm all for getting cash with 0%, so if you all see some way this would work, chime in.

 @Keith Nelson It seems to be pretty normal in the Charlotte area to not allow anyone in until after an offer is accepted. I see it mentioned in the listings all the time. The lack of rental history was strange, but the seller never really said no you can't have it, just that it wasn't available. I'm wondering if they just wanted to keep that info private until an offer was on the table. Either way, we waited too long, (which is strange too, because it was on the market for over 100 days) because with in 3-4 days of me finding the deal, it was under contract with another person. *sigh* If only we had acted sooner!

Would you have anything or know of anything that was a 30 yr FIXED for a commercial loan that was less than $500,000? We're not wanting a balloon payment, or ARM. Which is why we were looking at the 7%, because they offered it fixed over 30. It had a descending prepayment penalty over the first 5 yrs., but after that none.

 Ah bummer! Ok thanks so much for tying to find it Brian!! 

Hi Rob, I know 7% is horrible compared to a conventional SFH loan, but as far as commercial loans go, I thought it was good?? The purchase price was only in the mid 300s, AND we didn't want a balloon, so our options were limited. I felt like the 7% over a 30 yr fixed was a good trade to not have to worry about refinancing in 5-10 yrs for the balloon payment. Do you know of a lender that could have done better?? I'd love to get in touch with them so we could be ready for the next deal we find!

I can't say thank you enough to everyone that has responded. SUCH good advice and information!!! Unfortunately for us, another offer came in so we lost out on this deal. I think we were suffering a little bit from "analysis paralysis", but we will find another one I'm sure! I really do appreciate all the help!! BP is such a great, supportive place!

Any chance there is a transcript, or if the video has been moved to a different site? I'd love to hear the answers to the questions Michael had asked you!! Long shot, I know, as this post is from a year ago. :(

Here is the original post with all the questions:

Thanks for taking the time to make a post like this @Brian Adams .

So far I have primarily been interested in SFR and rehabbing for retail, I am just getting started in the rehabbing. Buying multi’s has been an interest and I think it is the direction I want to go long term after building up more experience and capital. Especially after listening to the Grant Cardone podcast it opened my eyes a lot to the potential of large scale multi investing.

If you don't mind I have a few questions that have been bugging me about investing in multi’s

• 1. In general what cash flow do you look for per unit after all expenses? $100 a door, $200 a door ect.

• 2. Is the goal to hold long term or buy, fix, increase income and sell after so many years?

• 3. Do you specifically look for run down mismanaged properties so you can add value or just look for decent properties for a good deal in the right markets?

• 4. Do you rely on cash flow for returns or the payoff when selling?

• 5. When investing in large multi’s out of state I would assume that you have to do this full time for boots on the ground work, I guess it’s safe to assume that if you have the means to do it you are doing it full time also. Does that sound about right?

• 6. What do you consider the sweet spot for number of units and being able to manage it easiest or does it not matter if you use third party PM’s? I have been under the impression that the more units the easier to manage with onsite management.

• 7. When you have several large complexes under your belt does the PM employees or company deal with most of the management freeing up your time to find other deals? Wondering how owning part of 1000’s of units affects your time when it comes to day to day management.

• 8. I am all ears if you have suggestions on other materials to learn large multi investing.

Thank you for your advice.

Good points for sure. I'm having trouble getting good comps, because there aren't any other properties like this one. Could I use a 3 bed/1 bath and a 2 bed/1 bath in a nearby apartment complex as a comp?? Or there was also a SFH that was 3 bed/2 bath, that was of a similar size. There just aren't any other triplexes to look at, and I know that as similar as possible makes for the best comp, but what do you do when there aren't any??

The updates made included new roof on both buildings, new gutters,fresh exterior paint on both, new screen doors, poured brand new concrete parking pads for both buildings, and serviced the tree canopy, all in 2016. I have asked my agent to push back on the rent roll/history, as well as the operating expenses, and as of this evening, we haven't heard anything back.

It's also been on the market for over 100 days, but I'm guessing that is because it's hard to finance being that it has to have a commercial loan, but is less than $500,000.