All Forum Posts by: David F.

2) I do realize that asking money from family and friends can only lead to disaster because many grey and fuzzy lines get obliterated. My point is that I don't know of any options. My other point to consider as opposed to buying these buildings is to act as a birddog, bring deals to people and make money upfront that way and gain experience and in time get to a point where I have enough money to put into a project where a bank AND potential partners would take me seriously.

Hello,

I was reading through David Lindahl's Multi Family Millions and was curious about a particular point he made as it relates to my situation.

The fact is, is that I have ZERO experience in multi families, and have zippo to put down as far as a down payment. In his book he mentions getting angel investors and others to invest in the property you present (with the accompanying business plan). My question is threefold:

1) The book outlines overcoming the fact of not having any money by approaching friends family and angel investors. Why would any investor, even family and friends give you money to invest with no experience to speak of? I have an MBA and have been working in commercial real estate (analyzing deals) for the last three years, but that is all booksmarts. I have zero real life experience, so I couldn't imagine any situation where someone would give me their hard earned money..why wouldn't they do it themselves?

2) The same applies to the bank side of things.. Never mind the complication of the fact that here in Canada ALL commercial loans are full recourse loans (that is a whole other can of worms to deal with), but with a bank looking at resumes and experience, I couldn't imagine my application getting through given the fact that I have never actually owned a building. Lindahl's book says that before you make the application you should have a business plan in tow with a reputable property management company ready with a marketing plan in place. I agree about being this ready, but again, has this worked for anyone?

3)The book mentions a finder's fee that I could potentially build into the deal for bringing a property to investors. Again, can this be done, have people done it, what is a typical fee (the book mentions 3-5%) and is this collected on closing?

I would truly appreciate all your help in this matter, especially people who have done these kinds of things as I think multi families pose a great oppportunity for investment, but again, how do I overcome the hurdles mentioned above. I spoke at length with someone in my office, who used to work for a bank about finding a building that has the potential to be repositioned, and brining in investors to finance it, and if I could not structure a way to own it, then I would find a way to bring it to them and add a consulting fee (3-5% of the purchase price) and make money that way. I was given all of the rebuttals mentioned in points 1 and 2, and as far as a consulting fee he told me that any investor would wait to give you that fee until they execute their exit strategy, and why should they pay me upfront. I would like to preface this with the fact that while he is a banker he has never owned real estate ever, so I don't put much credence into his advice, but I would like to hear any experienced investor's thoughts on this matter.

Thank you for your help.

Take care,

David.

Looking simply straight at the numbers, assuming they are actuals, etc etc...how is this not a good deal?

I put down 30% of the purchase price: $1,257,270
After debt payment I receive annually: $231,600

This gives me a cash on cash return of 18%, and this doesn't include:

the potential for increased rents

the fact that the mortgage is being ammortized and get am building up principal recapture

How is this not a great deal?

David.

Hello all,

This is the year I have made a solid commitment to myself that I would take real estate investing extremely seriously and get starting investing and making some money.I have an MBA in finance and have worked in commercial real estate analyzing complex deals for the past three years, so on the financial side, I have my chops.

Here is my question: I have no money of my own for a downpayment and if I would do a real estate deal, clearly I will need investors. The challenge is that I do not have any practical personal real estate investing experience. So, if I were to put myself on the other side of the equation, and someone without any experience came to me to ask for money with a real estate proposal, why would I give them money to do this? (This goes especially for bank financing, how in the world would they give me money for an investment property without any experience? Complicating matters further is the fact that here in Canada, all commercial loans from any lender will be a recourse loan).

I am looking for advice as to how I should go about investing. The only other alternative is to partner brokers with investors, analyzing the deal for the investors, putting financial packages together and collecting a 2-3% fee for this (it would probably have to be characterized as such given in Canada it is illegal for a broker to give money to someone who is not a broker for a referral or lead.

I appreciate your help.

Take care,

David.

While it is 7.9% COCR (actual cash in hand), If you included the principal recapture then the return is brought up to a decent level.

Do you not include principal recapture in your determination of a worthwhile investment?

THE HUN.

The goal would be to rehab them and sell it in a few years. The alternative was to hold and then refinance in five or so years when the market turns so that I can pull my equity out. This leads me to two questions:

1) What if these houses were held in an LLC, formed in the US?

2) Would a Canadian bank lend me the money?

Hi all,

I was hoping someone here would have some experience dealing with this. I am a Canadian and want to jump into the US real estate market right now. The question is: what complications can arise by the fact that I am a Canadian purchasing US real estate? Can a Canadian buy a foreclosure or REO?

Thanks.

THE HUN.

My goal: to complete at least one real estate deal.

It has been TWO years now, still on the fence, and my butt is killing me. My first actionable steps..well two of them, is to contact and meet a mortgage broker, and a real estate agent specializing in investment properties this week.

THE HUN.

Hi all,

For the longest time, I have wanted to invest in real estate. I have the drive, passion, creativity, and persistence and I know how to effectively leverage my resources. 3 years later...I am still a talker and not a doer. My greatest fear with real estate is exactly what this thread is dealing with. The fact is, is that you are walking behind closed doors and anything can happen and that scares the living !@!#!#!@!# (radio edit) out of me and has prevented me from pursuing this great industry. Reading about guns, and knives..I just don't know....

I don't know what I'm looking for; maybe I need someone to quell my fears. I can imagine that a lot of these issues come up when inspecting vacant houses. But scarier still are these issues that pop up in "normal houses" in "normal communiites". For every house I go to do I need to bring someone else, and we are both armed?

I would really appreciate any advice.

THE HUN.

This is a question that I have been wondering for quite some time. I am starting out in real estate investing and assembling my team. My question relates to real estate brokers.

I understand that brokers are a great source of deals. But in reality, brokers are people too, and a good deal is a good deal. That being said, if a property is "such a good deal", then why doesn't the broker take that for himself? Why doesn't he/she scrape up the money to control the property, or get an investor to back him up? Wouldn't they make more money off of it that way, as opposed to a commission fee? So, are the deals that would be presented to me, are they high quality deals, or simply the deals that the broker simply couldn't do himself?

Take care,

THE HUN.