All Forum Posts by: Jeff G.

@Rodney Miller, seller carry back isn't a strategy I've used. Can you explain what that means in this context? What was happening between the buyer and the seller financially for that 60 day window?

Is that "improvements" rule part of Dodd Frank(enstein), @Joe Splitrock? 

Thanks @Darwin Crawford,

I have a long history in IT. I'm dangerous (as in unskilled) with a hammer. It might be time to change that. Because I'm "the engineer type" my (current) perfect deal is one that is managed inefficiently. No heavy rehab, the occasional touch-up or basic upgrade or replacement of aged mechanicals notwithstanding. 

I'd bring their rents to market levels and modernize rent collection to be 100% electronic (for me) even if the tenants are still paying cash with deposits at 7/11 or the like. I'd then go take a proactive look at all of the manufacture dates of all of the mechanical. If it's mechanical and it's near or beyond it's manufacturers specified MTBF (mean time between failures) I'd proactively replace it to control CAPX going forward -- because now I have statistical projects as to when the important stuff will begin to fail. (Behold, the power of nerd.)

I'd hire a flat rate eviction lawyer (yes, they're a thing) who is also familiar with collections and have him handle all of the evictions. This would keep eviction costs fixed and simplify post eviction collections. Then I'd slap some reliable (third party) property manager in place. Yes, I know I might have to go through several property managers to get things just right. I'd get rigorous with tenant selection and, in a tight market, I'd loss lead with a free TV (or some such) with a longer lease -- assuming that's kosher in my state -- in an effort to keep tenants for at least two years, this reducing turnover costs.

Then I'd do whatever I could to add curve appeal: power wash the exterior, add painted rocks and nice plants, etc.

Is my engineer mind in fantasy land here or missing something major? Am I barking up the right tree? Is truly being a "systems guy" and "automaton guy" not enough of an advantage in this space? If it's not, I'll try to create other advantages for myself in addition to all of this.

@Mike Carr is this it? https://www.youtube.com/watch?v=8Bpp3_EcwLY

I'll tell you what I've done in the past:

I got stuck with a rental that smelled of tobacco tar like nobody's business. I ended up using bleach water and a sponge mop. I literally "mopped" the floor and ceiling several times. It wasn't perfect, but it was good enough after I let it air out for a while. 

If that is innefective... repaint with Killz. It's a brand of paint that is designed to be non-porous, so odors don't leak out from the underlying material.  

Thanks @Darwin Crawford, I just bought a copy of Never Split the Difference. I'll start reading and listening ASAP.

You're right, I come from a wholesaling background and I can spot a deal pretty well either in public records or from the road. It's actually kind of amazing. When I first started out I had no idea what a distressed property looked like beyond the most extreme and obvious cases. Now I spot them based upon all kinds of tells: is the grass knee-high? What does the roof look like? Are there curtains in the windows? On and on it goes...

I have a good idea of the value I bring: even in a situation where I don't have capital to bring to the table, I'm systematic and I don't give up. I'm also quite capable of going into "Sherlock Homes" mode, just as you described. I think I'm going to really enjoy that book you recommended.

I'm reading How to Make Big Money in Small Apartments right now. It gives me some basic formulas for figuring out property values and such. Do you have any recommendations on a book that covers the banking side of things? I can read a P&L and the like, but  some of the banking jargon is confusing.  It's very clear to me that there are some options in banking that the typical LO won't tell you about because they don't know themselves and the individual investor must know (and press) for these more unusual banking options.

Thanks for the reply and the pointers.

Ah, @Jason Hirko gotcha. That was what I was thinking, but I didn't want to "assume."

Okay, @Patrick L., what's a more realistic example?

 D'oh. I read that wrong.

Right, @Jason Hirko I either need a down-payment to grow as I move it serially from one deal to another OR I would need a money partner of some sort. If the deal is good, I don't anticipate finding the money to be a problem. 

Hypothetically..

Lets say I find a 40 unit complex.  Lets say it's under performing and only has 60% occupancy because PM sucks and rents are under market because the owner is old and hasn't kept up with inflation. Lets say the owner wants 100k down payment and it's owner financed. Lets say I get a cash partner who supplies the entire down payment and we agree to some terms and a time period... okay, now we've created an owner financed note and the property is positioned for an obvious value-play.

This isn't like wholesaling, which I'm much more familiar with, so it isn't clear to me how much money the cash partner and myself would get. Though, obviously the original owner would get his distribution from the rent rolls. Can someone clear that up for me?