All Forum Posts by: William Glass

BP,

I am looking to see what advice people have for using traditional financing for making cash offers. From my understanding you wave contingencies except right to inspect, so if property doesn't appraise you've got to find the money somewhere else. 

The market is competitive where I am for small MFs and most sellers won't even look at non-cash offers, especially when they are below asking price. 

I am not concerned qualifying for the loan (credit & income are solid) and will look at back up financing options should traditional fall through. 

What advice do you have from those that have done this or other pieces to the puzzle I may be overlooking?

Please do @John Thedford!

@Joel Owens Anyone specific I should ask for?

Hi BP,

Any advice on local banks/CUs that you have been successful working worth in Southwest Florida?

I'm shopping for conventional financing for duplexes at the moment and am looking to build a long-term relationship with an investor friendly institution. This will be my first property in the SWFL area and am looking at buy & hold for 2-5 years. 

Key words: Fort Myers, Lehigh, Cape Coral, San Carlos, Estero, Naples

@James Syed That is helpful and I agree with the same amount of headache regardless if it is a duplex or a much larger property. I want to implement systems that allow me to scale and with the 10 unit I'd have to do it from the start. Where as with the Duplex I would likely self-manage to increase cash-flow, which at the end of the day is not my goal. 

My thoughts are there is a much better potential for return on the 10 than the duplex at around the same price. 

I appreciate the advice James. What types of commercial properties do you typically invest?

@Curtis Bidwell Thanks for the advice. I enjoyed reading about your deal and looking forward to the updated numbers after your refi. 

I think that is the biggest piece as the area around where I am looking there is a lot of investment going into the surrounding areas. I am not sure how far that is proliferating at this point, but from what I can tell it seems that the rents are below market and the previous owner is absentee. Similar to what you've done on that sample property of streamlining operations, cutting expenses, and putting some investment into the property, you've seen tremendous upside. Still aware I have some more due diligence to do currently.

When it comes to financing a deal like this from a conventional loan standpoint, it is more about the numbers on the property from my understanding. I imagine I will still need to work with a number of lenders before finding one to work with, but what do you typically see from the conventional standpoint on a property like this? 

You cited 20% down on the deal you posted about, is that typical?

@Rosston Smith Good point. My thinking was that I wouldn't necessarily need to raise capital at the 200k range. Anything beyond that I would need to start exploring those options and without a portfolio of deals, my assumption is it would be harder to do so without a track record. 

At the same time if I can verify a solid deal I have no doubt the money will come. Good point to consider for sure as I explore this further. 

@John Thedford Great point John. I realize comparing the two is apples and oranges as they are both fundamentally different strategies. MF of 5+ vs SFR. I think you've brought up a great point in needing to understand the management piece to understand that expense. As I am based in Florida, I wouldn't be actively managing from a state away. While I have family in the area, I'd like likely outsource the management aspect. This is not the strategy in the case of a duplex or SFR if I bought in FL.

I've been actively looking for duplexes in the Fort Myers, Lehigh Acres, & Cape Coral area of FL. Price ranges for these properties are in the 130-200k range and I'd have to live in one side in order to secure the financing terms I need for at least a year before moving on, If I go at at alone. Had an accepted offer and during inspection a few things popped up and seller's agent was withholding information and not wanting to put things in writing so I withdrew. Back to the drawing board.

I'm originally from Birmingham, AL and property is much cheaper in AL than FL. I've found 9 & 10 unit apartment complexes that are priced in the 150-200k range. Granted these properties are in low income areas, but understanding i'm buying for cash-flow this seems like it may present a better opportunity. 

If I can qualify a good deal on an apartment complex, I can raise the remaining capital. 

Looking to understand what terms you look for and how you analyze deals. Apartment complexes are all about the numbers which I like more than SFH.

Any advice from anyone who is familiar with smaller apartment complexes in low income areas? 

@Indre White Thanks Indre! I'll keep you in mind for the Miami area.

@John Thedford I am interested in joining the REIA. I was looking for the upcoming meetings and saw all the current events posted had already passed. I'll follow up directly with you.Thanks John!

@Elena Sweeney Thanks Elena! I have been looking at multi-family and SFH in Cape Coral, San Carlos & Lehigh. I feel like I have decent understanding, but am still trying to figure out the intricacies. Seems to me the market is reaching a peak, but would love your thoughts!

@Peter Davis I appreciate it Peter! Oh wow that is interesting. How did you enjoy Madrid? Teaching abroad is such a unique way to connect with a culture and people in a meaningful way.

@Dave Dagostino Perfect Dave! I think it's a great time to focus on investing and you've seen a lot of RE deals in a unique way that many others haven't. 

@Willie Webb Thanks Will! Yeah I'd like that and be happy to connect when you are back stateside. Always enjoy meeting new people and talking REI!