All Forum Posts by: Benton Moss

@David Faulkner Thanks for the in depth answer my friend. All great information. I will certainly be building out my SFR portfolio and do not intend on stopping - just would like to diversify into larger properties at some point for my personal goals but I really appreciate your thorough analysis and do agree that in the SFR market, you can find a LOT more distressed deals if you know where and how to look.

@Tamiel Kenney Thank you for the due diligence checklist! Great info that I've added to my own notes for when I get to that first deal. I agree that the most important piece to the puzzle in diligence is having the confidence to walk if the price isn't right. I have worked on several $1-2 M self storage deals on the brokerage side where my buyer has walked simply because the numbers don't work. So I've seen that kind of discipline first hand, but never had to SHOW that discipline (which I imagine can be tougher when you're actually in that situation and have invested time and potentially money in the diligence phase).  

On the financing side, I have a couple of questions:

Why would you consider a bridge loan with potentially higher rates if you had the cash buffer to stabilize the property yourself? i.e. would you only resort to this if you couldn't get traditional financing because the property wasn't stabilized and the lender would not underwrite it?

Also, what are other differences between commercial and agency loans? I know agency allows for higher LTV but are there other stipulations with them? Are they more of a headache in terms of preparation and underwriting?

@Joel Owens Thanks for the great overview on retail. I hadn't really gotten interested in retail as much because, as you pointed out above, I'm simply not experienced with this category. Couple of questions:

What types of retail do you think have a competitive advantage in terms of brick and mortar vs. online? i.e. which types of retail do YOU like in your properties because they are not going away? 

Also, do you typically take a hands-on approach with the marketing to drive foot traffic to the tenants? 

@Dave Foster Thanks Dave! I responded to your PM as well - I appreciate the knowledge you shared above. 

@David Faulkner Thank you for sharing David - here are a couple of questions I have for you:

what in your opinion are the advantages of SFRs over CRE? In your experience, have dollars invested in SFR returned, dollar for dollar, more than CRE? Thanks!

@Jeff B. that makes sense. Do you have to identify properties that are specifically listed for sale or can you identify properties that are off market but that you may be able to persuade the owner to sell?

@Jeff B. Thanks for the great info. Can you get preapproved for the 30 year money once you identify the properties or did you have to wait until you had the next property under contract and actually have a deal in hand? 

So sorry to hear about the seller - that is definitely a risk with rolling equity in a 1031 that I've heard about is simply the timing. 

I like your conservative underwriting as well. I think that is great. Best of luck with your next deal! 

@Jeff B. Thanks so much for dropping the knowledge! I have read a lot about the underwriting criteria that banks and traditional lenders normally use. The two most important ones I've come across are the LTV of the deal and the DSCR. I haven't seen any deals that got funding at lower than a 1.2x DSCR but here is a question I have there:

If you have a solid DSCR of about 1.4-1.5 at a lower LTV (60-70%), could you ask for more leverage as long as it falls into the >1.2x range? I.e. 80-90% LTV as long as the cash flow covers debt? What is your experience with this?

Also, on the 1031 exchange - what are the fees associated with finding and employing a qualified intermediary on such a deal? I understand the mechanics and timing involved with a 1031 exchange but haven't ever heard how the QI's make their money in the deal. 

Thanks again for taking the time Jeff!

@Tamiel Kenney Thanks so much for the response! That is so encouraging to hear. And yes I do agree with you on the MF class - I would rather start with living quarters than storage or working quarters because you are very right in that. Have to live somewhere! 

Couple of questions:

On due diligence, what types of things do you wish you knew then but know now that you have been in the business this long? What would you look for? What are deal breakers in your opinion?

On financing, besides being non-recourse and allowing for higher LTV, what are the drawbacks and other differences between agency loans and traditional commercial financing?

Thanks so much again for taking the time to respond!

@Shirley Gregory

Sorry Shirley, I do not think the tag above worked:

Do you self manage the property of have a property management firm?

How long did the paperwork take with the refi's and the commercial loan? What were the high level terms on the commercial loan?

Thanks for reaching out!

@Lily Quan That is great advice. I will certainly connect offline! I appreciate your feedback and will be in touch.

@Tyler Bradfield I am looking for moderate value add situations. I have second hand experience with self-storage and MF through my mentor and would be most comfortable there. But not opposed to other areas either. 

@Shirley Gregory Thanks so much! Congrats on cashing out on the SF into a MF complex. A couple of questions:

Do you self manage the property of have a property management firm?

How long did the paperwork take with the refi's and the commercial loan? What were the high level terms on the commercial loan?

@Juan Vargas That's great. I got my last deal through a letter campaign as well. Would you mind if I PM you for more details on the letter campaign? 

@Juan Vargas That is fantastic my friend. Congrats on the 32 unit! Out of curiosity:

How did you finance it? How did you find it? Did you self manage or hire outside management? Was it local or distance? Distressed/value add or more turnkey? 

I know that I want to move into more scalable property types such as MF, Office, and SS, and am actively educating myself in every way possible from books and podcasts to a mentor relationship and the BP forums. Thanks for sharing Juan!