All Forum Posts by: William Bratrud

I started investing 7 years ago in a similar scenario. I was flat broke and about $60K buried in bad debt, we were living paycheck to paycheck and barely scraping by. After listening to BP podcast for about a year I had enough and knew that if I didn't take action nothing would change. Long story short, I took massive action. Without having a dime to my name I offered on and purchased a rehab property using private money from my Uncle, I searched online for a website to assist me in drawing up a simple "Note Secured against the Deed of Trust" This protected my Uncle and made sure he got the property in Lieu of foreclosure in case something unexpected happened. This also guaranteed that he would receive his money back plus 10% straight interest once I sold the home. This was a 6 month term at 10% straight interest and we supplied the note to the Title Co. when we sent over the purchase contract, they took care of helping us get it notarized and recorded against the deed of trust. When I sold that property I was able to completely pay off my uncle with his 10% interest, pay off our $63K in debt and still ended up with $42K in the bank. After this deal multiple family members and even some friends came to me and wanted to make a similar return on their money as well. To this day I have done virtually every deal using private money and I work with many family members, and friends to build my real estate portfolio. Using this method I reached financial freedom within 5 years and by 2021 I hit my first $1M capital in the bank. Previously an electrician I am now a full time investor and licensed Realtor who specializes in Helping other investors in East Tennessee. The dream is real but you have to put in the work! I think Grant Cardone said it best, " Everyone thinks their gonna leave there 9 to 5 and make lots of passive income as a real estate investor, but the reality is, your gonna trade your 9 to 5 for a five to nine, And if you ain't gonna do that you ain't cut out for this business......" Im paraphrasing but you get the point.

Bottom line, When dealing in SFR and Small Multifamily Private money is super simple to structure and with some basic steps anyone can make it happen.

1. Call your "rich uncle"( Friend, parent, boss, co-worker) and offer a 10%-12% ROI on whatever terms work for them.( 6mo, 12mo. 24mo. etc....)

2. Find a property to flip and put it under contract 

3. Draw up a simple Note: secured against the deed of trust and submit it to title for recording (Have the title co. help you with this step if needed or use an online document maker such as legalzoom.com, Rocketlawyer.com , etc...) 

4. Close on the property with the funds that your "rich uncle" wires into escrow/title

5. Get that thing rehabbed ( Use CC, or rich uncles funds, or any other method you can dream up to pay for the rehab)

6. Pay your rich uncle back and wait for him to say that was great let's do it again!

7. Grow your network of private money partners and repeat the process

*Other than you, No one needs to go on the deed unless they really want to. The note secures their interest in the property and removes their liability. 

I must agree with some of the other comments about partnerships, Just like a marriage they can be very tough! On the flip side, sometimes you may find a great partner! Ive experienced both and my current Real Estate partner of 7 years has been exceptional to say the least! 

I formed an LLC with a good friend. My partner puts in 100% of the finances to fund, value add and pay my commissions plus time I spend managing each deal. I do 100% of the acquisitions process & managing the team for value add, developement, rehab, marketing and exiting. We split all profits 50/50. I make a little extra on the management and real estate commission during acquisition and exit. We each take a 25% cut of profits at the end of each deal and we each leave 25% of the profits in the company to continue growing our capital account. We typically do deals in the 500K or less range and most are done cash without loans. If we do buy and hold deals we usually purchase cash and refi after the value add or rehab and get 90-110% of the money out. In the case of a buy & hold I also make a fee on management but we allow the cashflow to be used solely for building the company's capital account. In the case that we ever dissolve the company we will split what is in the account 50/50 and sell the portfolio at a 50/50 split as well or have it appraised and one buy the other out.

The example above is one investment "partner" that I work with. For several other investors I simply utilize private notes secured against a Deed of trust and offer them an annual ROI between 10-12% usually on a 12 month note with the option to extend if needed.

Some would say Im crazy for doing the 50 split but When I started this 8 years ago I had no money and was 63K in high interest debt! The very first deal I did paid off 100% of my debt and put 40K in the bank. Most deals since have been that good or better so I have nothing to gripe about!

Everyone is in a different place, you need to just start where you are, based on your knowledge and experience in the field and agree on something that benefits both sides in a fair way. Theres nothing wrong with being generous, your gonna make a lot more in the end if you esteem others interests higher than your own. My experience has been to get a foot in the door, prove your value, then soon enough other investors will start coming to you on better and better terms. The main thing is to be honest, trustworthy and find great deals! Most level headed people who have money are willing to invest in someone with this unique qualities. 

East Tennessee is an excellent choice, anything in Maryville, Alcoa, Oakridge, "West" Knoxville, Louisville, would be a great choice. Theres not a ton of multifamily on market here because the areas are desirable and the demand is so high. Hope this helps, - William

We are looking for The same. I am an investor/agent and i have a client who just closed on a 2 acre lot in Wears Valley. They already purchased their cabin package from Southland log Homes and we are looking for a General Contractor who can complete the build. Any recommendations would be greatly appreciated. 

Investment Info:

Mobile home buy & hold investment.

Purchase price: $124,000

Bought this property a little under market value as an apocalypse bug out location and to get our money out of the bank early January of 2021. We are holding as values rise and now, seeing how Biden didn't usher in Armageddon we will likely resell once the equity margin hits a decent enough profit. Until then we have 5 mountainous acres in the woods on a well with plenty of wild game and a year round creek. Hey if we need it, its there.....

What made you interested in investing in this type of deal?

Prices are rising super fast in our market, properties are becoming out of reach. This one was listed at a good price for what it had to offer and at the time i was happy to have my money anywhere besides the bank. At worst we would have a tangible asset that produces 1k a month in rent and our money would be safe as inevitable inflation lifts housing prices to the moon. At best we have a property that can rent for 1K a month while in the meantime inflation takes our equity to the moon!

How did you find this deal and how did you negotiate it?

Found this one on Zillow, did a drive by and the agent happened to be there cleaning the place up with a couple other gruff looking guys. I had no idea he was the agent, Dude was scruffy with a big ol beard, dirty jeans and a flannel. I walked the property and made an offer on the spot, 3 hours later we had an accepted offer, 15 days later we closed.

How did you finance this deal?

cash

How did you add value to the deal?

We negotiated a little lower price after inspections but mainly this one is an equity hold as prices have already risen dramatically in the area.

What was the outcome?

Still holding, looking to sell possibly this fall or next spring, we will see what the market does.

Lessons learned? Challenges?

I don't think ill buy another MFG home in Tennessee, its just a bit tougher product to sell as they are less desirable, and the values tend to be much lower than a site built SFR. On the upside, if the market is hot and climbing like ours currently is moving capital from the bank to real estate can be a great move. At the end of the day i believe we will likely make at least 20% on our money once we decide to sell. Compare that with the 0.01% - 0.03% that most banks offer and its a no brainer.

No insects or rodents just lots of clutter. 

This was a retired family member looking to make a little return on their money. They loaned $175k at 4% annual amortized over 30yrs, due in 10 or we could renegotiate another loan at that time if needed. Payment is $835/mo. 

Investment Info:

Large multi-family (5+ units) buy & hold investment in Maryville.

Purchase price: $425,000
Cash invested: $100,000

A little over 3 Acres with 5 single family rentals in a park like setting! These houses were neglected and the property needed lots of love. 6 months later everything has been renovated and market rents have exceeded our expectations. See the before and after photos of a couple of the homes.

What made you interested in investing in this type of deal?

At a little over 80K per unit this met all of my criteria for a good investment in this particular market. I think the locals may have been perplexed at the asking price given the condition of the property but it really just needed a little love, like 100K+ worth of love! I also loved the fact that although these were all on one lot each house had its own water meters and electric meters and trash service paid by the tenants! it doesn't get any better than that....

How did you find this deal and how did you negotiate it?

I found this like I find most of my deals.....Checking the MLS daily! Knowing what my price point is, what Im looking for, and being ready to jump all over it the second I see it. You gotta have rounds in the barrel and safety off in a market like this. I offered all cash 10 day close no contingencies, YIKES!.....I hate sellers markets! Unless Im selling of course....

How did you finance this deal?

Cash from a money partner.

How did you add value to the deal?

We invested a little over 100K to rehab most units inside and out and got everything up to market rent.

What was the outcome?

This is an excellent property with exceptional cashflow and after our repairs and remodeling it has nearly doubled in value creating a ton of equity on top of our rental income. There a plenty of exit options down the road with this one, heck we may even consider sub dividing and selling them off as individuals for around $200K each, but for now we are enjoying the cashflow.

Lessons learned? Challenges?

This was my largest cash purchase to date so that was a little stressful, we are encountering some challenges in the refi stage as lenders don't know quite how to treat the asset. We may have to sub divide a parcel to make it 4 SFR on one lot and the MFG home on another. Thats definitely something to consider if you ever buy a property with a single family home and a manufactured home on a single lot, lenders don't want to touch them!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I sure did, Carlton is a great agent in Maryville TN, but hey Im a great guy too so if your looking to invest in east TN lets connect and see if I cant find what you're looking for.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Louisville.

Purchase price: $325,000
Cash invested: $6,000

Brick fourplex consisting of four 2 bedroom 1 bathroom 850 SQFT units in a central location 20 minutes from downtown Knoxville

What made you interested in investing in this type of deal?

I have always wanted to buy a fourplex it was one of those investments on my bucket list for multiple reasons. I liked this one in particular as all units were rented out and although two of them were well under market it still had cashflow from day 1. I saw this as a simple value add with minimal work and in a market as hot as east Tennessee I knew this would likely become a great equity by appreciation move as well.

How did you find this deal and how did you negotiate it?

I watched the market everyday I knew my magic number and as soon as I saw this baby go live I booked the showing. After walking the units and giving a halfhearted visual inspection I made an offer on the spot. Knowing that this thing would disappear if i hesitated, I offered all cash with a 15 day escrow and no contingencies. I did ask for a 5 day due diligence and the seller accepted my offer.

How did you finance this deal?

Cash. I put 125K of my own money and got a private loan at 4% with 30yr amortized and due in 10. this gave me the 325K needed to close.

How did you add value to the deal?

I raised the rent on the under market month to month tenants knowing that in the process i would lose at least one low paying tenant. This opened up one unit for rehab which was basically just paint. That unit was easily brought up to market rent and theres one more to go.

What was the outcome?

After its all said and done this property cashflows around $2100/mo. After I Refi to get the rest of my money out and pay off the private loan the property should cashflow around $1400/mo. and thats with leaving absolutely no money in the deal.

Lessons learned? Challenges?

It made me a little sick to know that the seller picked this thing up for 100K less only about 6 months before i bought it but I purchased anyway because if Ive learned anything as an investor it is to run by numbers and not emotions. If i would have walked away because the seller was making a disgusting profit I would have lost out on one of my best ROI's to date.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I did use an agent. I wasn't licensed at the time so i had the help of a great young investor minded agent who I had previously closed a few deals with. I'd recommend Carlton Hackney any day, but now that Im licensed you could also connect with me if your looking to buy in east Tennessee.

Investment Info:

Single-family residence buy & hold investment in Maryville.

Purchase price: $209,000
Cash invested: $1,000

I Purchased this property as a turnkey Single family 3 bed 2 bath in desirable Maryville School district.

What made you interested in investing in this type of deal?

The house was turnkey, the market was skyrocketing and I had a chunk of money in the bank that I didn't want to see disappear with the onset of the new Biden regime stepping into power.

How did you find this deal and how did you negotiate it?

We were looking everyday, just waiting to pull the trigger. Nothing was coming available under 200K even stuff that needed a bunch of work. I saw this thing come back on the market after going pending and whammy I scooped it up. Didn't ask for anything, no inspections, no appraisal, no finance contingency, I gave the seller a dream offer that they couldn't refuse. All cash 10 day close no hassles. Sometimes you do what you gotta do....

How did you finance this deal?

Cash

How did you add value to the deal?

Installed recessed LED lights in the kitchen and laundry, painted the exterior of garage door and shutters, replaced exterior wall lights. The house was pretty much turnkey i just added some finishing touches.

What was the outcome?

We rented the house out right away to some great tenants and put a private loan on the property for 175K. We left about 30K of our own money in this deal and it currently cashflows quite well at about $600/mo. after all expenses.

Lessons learned? Challenges?

I probably could have offered about 10K less but then again i may have lost it. When its a hot market sometimes you just need to do what you have to do to make the deal happen. At the end of the day Im happy with the investment but it will likely be my last single family as I typically am seeing much greater returns in my small multifamily properties.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, i sure did use an agent and I worked this deal the way I work all of my deals. I build relationships with Agents and ask them to bring me deals, when they do I am happy to have them represent me. Even now that I have my real estate license I continue to work with other agents in this capacity. Im a firm believer that there is plenty to go around and at the end of the day it is our reputation and our relationships that determine our success as real estate investors.