All Forum Posts by: Account Closed

James sorry about your townhome. The storm flooded one of my properties' basements. It wasn't 6 feet of water though. I would say you evict them. It depends on whether you believe you can find renters for 2200.
But A lot of times tenants like to test thei landlords. If you give them 400 bucks off this time whatabout when they are late next? Maybe you have them resign a new lease for month to month and just put it on allthe aparment finders places until you find a renter for 2200 or more. We are renting a 3bed 2.5 bath in lakeview for 3000/ mo so depending on location it's not impossible. Did u fix the water problem so that it won't happen again? Good luck. I hate Chicago water!!

Whats a NOD list? Is that notice of delinquency? Just a guess.

A: 6 cap is the kind of cap rate properties get in Manhattan. If this is an A grade property in a prime commercial district you can tell your investor that its a great property with upside in appreciation. Though that statement would probably be a lie unless you were in Manhattan.

What you need to do is find out what your comps are. If comps in your area are showing that properties are selling currently at 6 cap then maybe this would be reasonable but most places in the country are not selling at those prices. By finding what cap rates are for nearby properties you can find the true value of the property. If you find that properties nearby are generating 6600.00 NOI as well, but selling for cheaper, that is just justification for a lower offer. However like I said if you find that cap rates in the neighborhood are 6, then so be it.

By comparison, for buy and hold here in Chicago we are looking at I am getting 12 cap. If we are buying and renovating to hold for rental we are looking at 20+ cap.

B: You could still present it to your investor, though you should remember that every deal every interaction you have with an investor they are continuously building their perception of you.

If you present a plan of this property, and write a letter about why you think this property is worth this much and that you are confident that this is a good deal, while providing comps and a detailed proforma and cash flow model, then it should be okay! If you present a plan you are not confident of, then it just makes you look like you don't know what you are doing, and it will make you look bad. If you can look in your investors eye and tell them its a good deal then go for it.

Just a thought - you are trying to wholesale properties that are essentially at retail prices. You should look for bigger discounts such as in not great neighbhorhoods or distressed homes.

Good luck!

And those prime borrows... when you look at their payment patterns they just never walk away from their underwater homes! They just do every thing they can to pay the bills! What is represented now is basically the depletion of reserves.

Check out this report on residential mortgage backed securities (RMBS) that came out on Oct 5.

A few things that it says is that delinquencies continue to increase at all time highs. Liquidation timelies continue to increase and banks are finding it more and more difficult to liquidate property. In particular, the report note that 12% of all prime borrows are now seriously delinquent. It notes that the borrowers in the RMBS pools that are "stronger" are able to refinance, and in particular, stronger prime borrowers are refinancing and thus depleting these particular securities of paying customers.

Fitch also "projects a 10% national decline in home prices and for unemployment to decrease to 8.2% over the next two years."

So a few takaways: Fitch thinks housing prices will continue to go down 10%, and the report shows that delinquencies for prime borrowers are increasing in delinquency. There could be more foreclosures up ahead, especially in nicer neighborhoods where a lot of these prime borrowers resided. I think we should consider that there is still a lot of inventory to come. Banks are going to have lots more property that will be coming through their shelves and they are finding it taking more time to liquidate. Time to start an REO property management company.

It is available here.

Hi Dan I never really read a book on the topic, but its fairly self explanatory. A good person to ask would be someone you know who is an investment advisor. Many are very familiar with SDIRAs. There is also a lot of info on the websites as well as this site on Bigger Pockets. I use Entrust, they have lots of good info on their site. http://www.theentrustgroup.com/

Like that aggressive Armando guy on flip this house who has 30 minute infomercials on Sunday mornings, opposite Meet the Press... I always wanted to know what a guru's product looks like and have sometimes been tempted to order his stuff. I wonder if I gain 20 lbs and put on a shiny button down shirt if I can sell books on tv too. The closest thing I have ever gotten to subscribing to a real estate program is my membership at the Chicago Public Library.

I think you are asking the wrong question. There are no "fair" when it flee to the interest rate you provide. The more risky you areas as a client the higher rates will be. That includes your credit score, real estate track record, amount of collateral...

10% is a lot!! I would say more to 2-5% sounds about right. I am currently in the process of figuring out the same thing. Standard hedge fund referral fees are about 2 or 3%. I am working with a gentleman who is an investment advisor and has a big bunch of client money under management. He likes these real estate deals I've been doing and wants to introduce more of my deals to his clients. We are talking about 4 or 5% of the money brought in as the commission. he would also do all continual client relations. It will be as if I hired someone to do all my fund raising and customer service. If I wanted to fund raise I could go out and talk to people who I know, and then when they want to invest I can just say hey - call my guy. Then I can keep doing the real estate thing. At least thats the idea. We have already done several deals together but we are trying to do it on a bigger, on a more organized scale.

I think 10% is very high. I don't think you should pay them to create "deliverables." I bet you can create your own better marketing documents, including pitch book and projections and everything!!

Good luck