All Forum Posts by: Wendell De Guzman

 The only time I would accept just a $100/mo cashflow is if I have built-in equity in the deal. I have property with about $150/mo cashflow but once sold, we will have a $70K profit on it.

 Jay, I am sending you the Invite via a PM.

 Lynda, this is a virtual lunch. 12 NN CST is 9 AM for you. It's also recorded. I suggest you register anyway so you get the recording. I will PM you the Invite.

 Here are the ways you can find wholesalers in your market:

1. Google "We buy houses [city]". Then call at least 10 of those people - chances are, some of them are wholesalers.

2. Search BP (search field on the upper right). Type in the same keywords like in the Google search above.

3. Find out the different Real Estate Investors Associations in your city and attend ALL of them. Network, pass out your business cards and talk to the wholesalers you can find there.

4. Seek out different real estate groups in your city that has a Meetup.com page. Choose the largest and active meetup groups and do the same thing you would do as #3 above.

and 

5. Seek out "real estate investors" in LinkedIn and connect with them. Chances are good some of them are wholesalers and don't mind wholesaling some of the deals they get their hands on.

 It's awesome that you're doing this.

So far, your answers are spot on and makes sense.

I've been investing since 2003 and have bought over 160 apartment units in addition to being involved in hundreds of single family deals. Here's a link to my BP podcast: http://Biggerpockets.com/show65

So I can (as well as the other experts here on BP) spot a fake expert here on BP based on the answers and so far, your answers look good. Continue doing what you're doing. Good job!

I totally agree with Jay H.

When you have a hard money lender charge an upfront fee - specially $3,000, then RUN IN THE OPPOSITE direction. There are many hard money lenders that don't charge an upfront fee. The only fee that a good HML charges is a third party appraisal fee ($400+) which of course is not really a fee that the HMLs make money from but it's needed for their underwriting.

If you guys need help with HMLs that don't charge an upfront fee, I can help refer some to you. Just send me a PM.

 Brant,

I've done BOTH (listing with an agent and using a flat fee transactional broker).

My experience (although I've used the flat fee only once) is that LISTING AGENTS have sold my properties faster. The reason why is that the right listing agents will have:

1. BUYERS already lined up in the area where they specialize in. Hence, they can already pre-sell your property even before construction is finished.

2. RELATIONSHIPS with other agents who may have buyers in those areas. He/she will also have RELATIONSHIPS with lenders who in turn may have borrower-buyers interested in buying.

3. MARKET KNOWLEDGE on the RIGHT LIST PRICE for your property to sell. Even though I've been investing since 2003 and know how to get my ARV or Fair Market Value, it's always good to have an expert "second opinion" if you will. It's like a doctor if he becomes sick, can surely try to cure himself but it's good practice for him to get checked up by another doctor. Sometimes, rehabbers fall in love with their project and think it's worth $1M but a good listing agent who is unbiased can tell him to list for $899,900 to sell quickly.

With a good listing agent, I got my rehabs sold in less than 30 days at 99% of list price vs. when I used a discount flat fee listing, my property just sat there with NO BUYERS after 3 months. 

Hi BP Nation,

I just had my first "virtual" LUNCH with other real estate investors and it was awesome.

And this is why I am putting this out here for BP members to benefit from, specially the newbies.

A virtual lunch is basically a webinar but more interactive. It's basically like "Skype" and we talk "shop" (real estate investing).

In a virtual lunch, like in a real lunch, you can talk about your frustrations in your real estate investing. You can pick the brain of a real estate expert you're having lunch with. He/she can talk some strategies to not just survive the 2017 real estate market but to actually thrive and crush it. He/she can even review a deal you have and analyze it for you on whether the deal is a good one or a bad one.

1) So, if you can have lunch with a real estate expert (say those who have been featured in a BP podcast), who will it be?

2) What will be the topic you want more answers to or you have the most questions on? (wholesaling, funding, house hacking, rehabbing, etc.)

3) What is your number ONE frustration with real estate investing right now?

I can help put it together and get those BP podcast guests to spend one hour on a "virtual lunch" with you.

What's the benefit for the BP Real Estate Expert? More exposure and with the higher exposure comes more opportunities to do more deals. With this first ever virtual lunch I did, one of the attendees sent us an off-market deal that we could wholesale to our 3,000+ buyers.

Oh, and we will do this Virtual Lunch at 12 NN once a week so while you're literally eating lunch, you can listen in (on your phone or in front of your computer) vs. eat lunch with your officemates who have no clue what real estate investing is about.

What do you think?

I look forward to answers to the three questions above. Thanks!

Yia, this is a bad deal anyway I look at it.

Your cashflow and CCR are too low.

Have you factored in REPLACEMENT RESERVES? If you don't know what that is, you probably have not factored it in.

I have bought over 160 apartment units so trust me when I say this - you will lose money on this deal. It's a bad deal. Either low ball the seller on this one or go look for another deal.

 Jonathan,

You can use the 50% rule as a quick way to calculate Net Operating Income if you don't have the operating expense numbers yet. Of course, you need to verify this once you get the operating expenses.

Based on a gross income of $793,200/yr x 50% rule = $396,600 NOI. If this is true, at the purchase price of $2.5M, this has a cap rate of 15.86%.

You then deduct your debt service which is $27,755 x 12 = $333,060 from the NOI

Equals cashflow = $63,540/year

Most likely you will put 25% downpayment - that will be $625,000

Your cash on cash return is Annual Cashflow/ Investment x 100 (%) = 10.2%/ yr.

The above analysis is very simplified of course. You can get it amortized over 25 years to lessen your debt service and increase your CCR.

One issue you might encounter is getting financing for a deal like this. Your networth has to be equal or more than the loan balance. If not, you might not qualify for financing even if the building qualifies for financing. Also, to get financing for a 101 unit apartment, you have to show you have experience or partner with someone with experience with a multi unit apartment of similar size.

To get the building for as little money down as possible, listen to my podcast: http://Biggerpockets.com/show65

In that podcast interview, I revealed how I was able to buy a $6M building (100+ units) with only $5,000 cash out of pocket.