All Forum Posts by: Ray Arends

Hi @Dennis Hollier,

I'm guilty of asking you questions before reading the entire thread. I apologize. All of the questions I asked you had already answered.

There is always the option of seller financing. The banks that have loaned me money require an annual personal financial statement as well as annual tax returns. I recognize this as standard business practice and don't see why you can't do the same. Vet your buyer. As long as the property shows a debt coverage ratio of 1.25%, it is attractive to both lenders and buyers. If it is making money it will sell. Hell, I might buy it!

 Here's my scenario. You have owned your small Multifamily for 5 years. Your tenants have amortized the property to the point you have a bit of equity. This is Hagerstown, so their has been no appreciation. You have maintained the property and it is fully occupied. The numbers look great! You have kept the building nice and desirable. Rents are at market. 

You recognize you are competing with multiple property owners for a limited tenant base. Your units, while not over the top, are at least comparable with those at your price point, clean and well maintained.

An opportunity arises for you. You need to cash out and persue the holy grail, whatever that may be for you. The MLS is a slow process. I'm not a real estate agent, but I think the mere mention of 'possible owner financing' brings a tidal wave of offers, good and bad. Vet them. Owner financing comes with a premium. There is a reason the potential buyer cannot obtain conventional financing. Yes there may be increased risk.Default? Regain complete ownership of the asset.

Buy it right. Maintain it. Manage it or hire professional management and ' manage the manager'.

In a nutshell, buy and hold, sell it, or finance it. That's all I can think of.

Hey @Dennis Hollier, 

I am jealous of anyone able to eke out a living as a wordsmith! Kudos sir!

Look at the days on market on the Hagerstown MLS as well as the sale price versus listed price. Hagerstown is a buy and hold market in my mind. Selling is not a good exit strategy unless your tenants have sufficiently amortized the mortgage to allow you wiggle room in the selling price. Are,you looking at Multifamiliy or SFR?

@Dennis Hollier @Andrew Michael, I concur with your opinion Andrew, Good cash flow, no appreciation in Hagerstown. I'm okay with that, it just depends what your goals are Dennis. View anything you are interested in prior to purchase. I have made the mistake of submitting an offer of a property sight unseen because the numbers were amazing. I later viewed the property and realized it was not something I wanted to be associated with. Look at what you are you buying, your decision to purchase is incomplete without a walk through. Hagerstown has multiple property management options, but I would not buy if your plan is to be an absentee manager. Managing the manager is necessary, but don't give up your ability to visit your properties because of your geographic location. Hagerstown is not a passive investment. 

Hi @JR T. How about contacting a security system installer instead of an electrician? A quick Google search turned up two such companies servicing Hagerstown. It seems to me the burden of compliance would be on the installer as opposed to you.mBest of luck!

@ Christopher 

@Account Closed before you buy anything spend a couple of hours driving the city. Look at anything you want to buy in person. I made an offer on a six unit in Hagerstown sight unseen and by some stroke of luck my offer was declined. The numbers looked amazing but when I took the time to view the property it was not something I wanted to be associated with. The property later sold for my offer price, 10k under asking. Whew!

@Robert 

@Robert Fountain I concur with your assessment of the north end of town. Hagerstown transitions quickly from urban to suburban north of Fairground Ave as one drives north on Locust St. 

@Russell Brazil I appreciate your insight into the Hagerstown market. In my opinion,  a 35k annual salary is an ideal candidate for one of my  one bedroom units. They are not potential homebuyers and will rent until their income increases. BTW, I enjoyed your appearance on the Bigger Pockets podcast, a stellar appearance from someone in my area. Well done!

In my limited experience, 10 caps are easily achievable. As always, buy right!

@Sabrina Savinski

I sent you a PM

@Sabrina Savinski, yes and yes. Synergy management has exceeded my expectations and I would suggest you talk to Sheryl Bowers there. I still like Hagerstown and continue to invest there. My current deal has been a roller coaster ride as far as financing goes but it looks like we will close mid August. @Mike Webb, please keep me updated about your latest acquisition! I really need to meet you over coffee at some point. I have not forgotten property management advice and interested in hearing about your business.