All Forum Posts by: Account Closed

I'm under contract on a property in Illinois and we are under attorney review. We are tying to close the deal and they just reactivated the listing on the MLS. There were no disagreements, so I'm wondering what my recourse could be since now they are on default of our contract. Thanks!

I am putting together my first couple of deals and in the process of raising the equity, which will mainly come from family/friends at this point. I've been looking everywhere to find some type of spreadsheet that helps to project out the investor return of capital as well as their equity, but cannot find anything that makes sense.

Here is my plan, but I'm open to advice or what works/doesn't as well. I plan to give my investors a preferred 9% return and a 50/50 split of the profit after that. It's pretty simple if I sell the property, but I cannot figure out how it would work if I do a cash out refinance and hold it. 

Also, has anyone found an easy way to possibly have the investors get their return, but not retain ownership of the property after a certain "hurdle"?

Any advice would be great, thanks!

Does anyone have any information or resources that can help shed some light on Mount Pleasant, WI. I've run into a number of clients who are starting to look at residential development and smaller fix and flips in that market. Any resources or if anyone specializes in that market, I'd love to connect and pick your brain!  Thanks!

Christian,

I'm a lender with a First Bank of Highland Park on the commercial real estate team. We can definitely look at doing something like that for you, especially if you are doing the rehab work with cash. Typically if it's stabilized or if you have leases, we can go up to 75% - 80% LTV, but we'd want to take a look at the total cost as well. Right now, depending on the loan size, rates are between 4% and 5%.

PM me if you'd like to discuss further.

I'm wondering if the network has suggestions for solid and reliable general contractors for rental property rehabs in Milwaukee.  I would like referrals for a few that are well versed in the low income-type of rental and understands the needs of those type of single family homes and duplex buildings. 

@Aaron Barrett, there are a number of investors who are able to make nice cash flow and returns on properties in more difficult areas of Milwaukee as everyone stated above.  However, no only might the rehab cost more than the property will be worth, so you must bank on cash flow to get any sort of returns, you also will need to manage these properties yourself.  Third party property managers are great, but some of these units will need a very close "hands on" approach and a third party manager might not have the ability to do that.  If you fully understand the market, can self-manage, and are comfortable collecting rents in the areas, there is a lot of money to be made.  Just be sure to do your research and discuss with others about each neighborhood in Milwaukee.  It's a great city, I've just seen a lot of people get burned because of the "cheap properties".

Derek,

I am a portfolio lender by day and a beginning investor by night, so from my personal discussions with hard money lenders, I do think it's doable.  A lot of those places tend to not worry as much about credit, but more about the property and the deal itself.  The only issue is that, as you know, they are short term (6-12 months) at the most.  Once you hold for longer than that, it becomes very expensive.

I actually found a lot of luck on the "Marketplace" tab up at the top and "hard money lenders" page.  There is a lot of good information there and some links as well for online hard money lenders.

Also, some of the newer hard money lenders have rates around 10%-13% and are very transparent with fees and equity that is necessary.  I spoke with some of the people at LendingHome and they were very helpful and transparent, so that might not be a bad place to look.

Derek,

The concern is that if you annualize the 3% monthly, the rate is 36% APR, which is really high and leaves you with no room for error. There are a number of hard money lenders who could lend at a percentage of the ARV of the property and allow you to put very little cash into the project initially.

Also, if your wife makes $55K annually and you are currently unemployed, you don't want to pour all of your hard earned emergency funds into real estate projects.  If the market shifts at all or your friends decide they find a better option while you are rehabbing, you could be stuck.

One other idea would be to partner with your friends who you will be flipping the properties to.  You act as the project manager/general partner and they can provide some of their initial equity and possibly sign with you on a hard money loan.

Do you have any equity in your home or the rental property you hold?  Can you tap into one of those for cheaper debt?  Otherwise, you might want to wait until you actually have the money from your settlement instead of taking a 36% advance.

Hopefully that helps!

Zach

I am currently working to help my family liquidate a portfolio of roughly 30 properties in Milwaukee, WI.  The portfolio is a mixture of rental single family homes and duplexes.  

They have spent a large amount on fixing deferred maintenance and city violations etc and now they just want to liquidate.  These properties require a full time manager/owner and they do not have the time to devote to the portfolio.  The portfolio as a whole is fairly leveraged, which is part of the problem on our end.  Some properties have nice equity, but some do not.

Any help the community can offer as creative ways to liquidate or unwind this portfolio would be greatly appreciated.  I'm sure you or someone you know has been in this situation.

Thanks!

Would you have any interest in a portfolio of roughly 30 units in Milwaukee? Cash flowing properties but need to be recapitalized.