All Forum Posts by: Travis Lauchman

Hey @Dave Spooner! Thanks man it was a fun deal. No I think in this scenario we played it pretty well for it to be as close to a win-win as possible with Seller. I will definitely keep this structure as an option for future deals. It's a big benefit for those of us, like myself, who borrow hard money for acquisition

What many of us love about real estate is that there is no limit to flexibility and creativity in deal making except for our own limits on education and understanding of structure. The great news is that with time many of these structures become evident simply through problem solving. I want to share an interesting structure of a deal that turned out to be a great success for our company and that we will look to replicate again :)

The scenario: Seller owes around $125,000 on an end of group townhome. In the condition that it's in, the property is worth about $85,000 to us. We make an initial offer of $80k and its rejected but in that communication we learn the Seller is moving south and knows that they will need to bring cash to the table to get the property sold. We approach them again offering an additional $10k for an offer price of $90,000 if they will hold the deed/mortgage so that we are able to avoid transfer costs, raising the capital for purchase price, etc. They agree to those terms and we setup a few legal instruments to protect all parties:

1. 1. They give us Power of Attorney to sell the property without prior consent assuming they will get at least the $90k promised paid toward their mortgage
2. 2. We have a internal agreement drafted by attorney detailing the structure and timeline including sell-by date, who is responsible for electric, insurance, etc.
3. 3. Our title company holds the mortgage balance above $90k that the Seller would need to pay at closing in escrow - just in case they change their mind and leave us holding the bag we wanted to make sure those funds were available! This was enough to make us comfortable investing the renovation cost. 

We spent around $47,000 renovating the property and listed it at $199,900. We received multiple offers in the first 3 days and landed on a conventional offer at $210,000. Importantly, we steered the end-buyer toward our title company so that the transaction mechanics wouldn't get overly complicated. With only $47,000 of our own capital invested we were able to return a $60,000 profit making it, strictly from a cash-on-cash return as a flip, our best deal ever. 

There are no limits to what we can accomplish out here. We were fortunate to ride a hot market to increase profit and its vital to keep a pulse on that but without a little creativity we could have easily accepted the 'no' after the initial offer and moved along with life.

Let's keep making the magic happen, everyone! Have a great weekend!

@Erick Chavarria I've dealt with 50+ Balt City renovations that have required underpinning. It will require structural engineer plan set, permits, and a bunch of guys working for a couple weeks 😎. Let me know if you would like some contacts of folks I have worked with recently... Happy to connect you!

@Jeff S. Difficult to dream-up a more compelling argument for title insurance. A topic most don't adequately understand in coverage or cost. Hopefully this'll push everyone who reads and needs to become more conversant! Thank you for sharing and relaying so succinctly!

@Spencer Gray thanks and done!

@Bjorn Ahlblad you hit the nail on the head. I suppose I had my language twisted - I definitely want a template that will enable me to quick analyze for underwriting purposes. Thank you for clarifying!

@Scott Runyan thank you! sending message now and appreciate it in advance. 

Good Afternoon All!

Does anyone have a multifamily profroma that they'd be willing to share and walk me through? I want to become an expert in analysis of larger deals as we are steadily increasing our single family unit count and coming to understand the blinding management pain that comes with having singles all over the place (ha). I would happy to pay for the template and the time to walk through the proforma; open to any other ideas for multifamily analysis as well!

Thanks all have a wonderful and productive day. 

@Michael Ealy I figured you'd be able to drum up something!

I am grateful for two very actionable pieces of advice within this thread. First, I'm planning on joining Baltimore's Chamber of Commerce. 2, I'm going to review the City's master plan. We have so many neighborhoods that can use this type of love here in Charm City!

Thanks again for sharing and I look forward to hearing what you are up to next. I'm also very curious to hear your thoughts on sourcing apartment deals that convert to wholesales. Happy Hunting!

@Michael Ealy for where I am now I'd rather sell and roll a large portion of the proceeds into another value add deal but keep 500k liquid as personal reserves. What an incredible deal - congratulations!

Hey Everyone, 

As the story often unfolds, I have been in residential real estate for about 5 years and am making the transition into commercial. My partner and I just purchased a warehouse in Cherry Hill and I am thrilled by the new challenge of project managing, leasing, and truly understanding the local commercial niche. I am simply dropping a note to request any feedback those with experience have (particularly in Baltimore) for expediting the learning curve. Seeking to network, attend local meetups, and review deals that others are willing to share whether you are seeking to sell, lease, or just have a success story. Happy hunting everyone and I hope to see you in Charm City!

Best,
Travis

Welcome @Anthony L Brown! I haven't been the most active in these forums but have been fortunate to land with a strong team of wholesalers, buy and hold investors, and flippers here in Baltimore City. We currently wholesale 5-10 properties per month and purchase 1-2 to keep in a portfolio. Happy to share anything that I have learned along the way. Perhaps the best piece of advice I can think of now is to consider your 'why'. There will be so many times that the alternatives to this profession seem irresistible;  with commitment and a strong enough reason for succeeding there is only one way to go!