Can I Make This Work, Or Do I Stick To Bird Dogging?
I'm bird dogging in an attempt to raise capital so that I can invest in real estate myself. I'm bird dogging for an out-of-state investor, looking for apartments. I had always thought I would only want to buy SFR's. I had never previously thought about buying multi-family properties. I have no money at all to put into the property. The seller is willing to carry a $10,000 note. This is a $215,000 property, so this is not quite 5%. I know that I would be very lucky if I were to find financing for this, but does anyone have any creative suggestions on how I could make this work? The seller is motivated because he has an opportunity to buy a bigger property, but can't as long as he still has this one.
Also, does this sound like a good first deal for a brand new investor? It is a 7-unit apartment complex. Rents total up to $2900/month, landlord pays utilities 295/mo. during peak months). 100% occupied, property in good condition. Also, one of the longtime tenants does most of the property management and maintenance in exchange for $100 off his monthly rent. I did the number crunching thing, and the numbers looked good to me, although I am pretty inexperienced at this.
I would really appreciate opinions and creative ideas for making it work. So my questions are as follows: Can I do it? Should I do it? Or do I need to just bird dog for a while and forget about this one?
It helps that she's willing to take back a 10k note. That leaves you with 205k. You could shop it to investors and partner up if they can provide the capital.
If you're credit is good, you could try for a mortgage if you can come up with 10-20k down. A 180k property at 6% for 30 is about $1100 + tax and insurance, which would still leave you with great cash flow.
If you think you'd like to sell after two years or so, you can go after and interest only loan. You'll get a better rate, and when you cash in, you'll pocket the appreciated value (probably over 20k).
In that scenario, you'd profit about 40k+ over two years. It's definetely a deal worth looking at, but do your due dilligence. There's always a way to make it happen.
[addsig]
I've thought about the possibility of partnering up with somebody, but I wasn't sure how that would work, since I don't have anything to bring to the table. My credit isn't horrible. My middle score is 654. There is an REIA meeting coming up in my area next week. Perhaps I will find someone there.
Another thing I forgot to mention about the property is that there is room for development. Should I try to pitch this partnership idea to someone who would want to do some developing?
I know that I'm a little green myself, but I will tell you that I've spent my time thus far studying and learning from other investors.
I say that if the numbers work out like you've mentioned, I would not give up until I had the deed in my hand. If you need to use partners, your partnership will be run in accordance to what you and your parners agreed upon. What you are bringing to the table is a flexible seller and a great cashflow property, and most importantly it's your time and effort you've invested so far. Anybody that is looking for a good investment could help you out for a percentage intrest in the property. (For example: If they provided the down payment, you carried the seller's note and bank financing, you would give them a percentage of the monthly cash flow and a share in the equity based on what you both/all agree is a sufficient and fair return on investment. Also, don't forget how management plays a roll in a partnership it could be shared or your responsibility for a certain management fee or as part of the agreement for them providing their share. If neither of you is certain how to manage property properly and effectively, that could be done by an outside management company (I would recommend property management studies over using an outside company for a property of that size). I hope this all helps.[ Edited by ibohero on Date 05/29/2004 ]
Thank you very much for those suggestions! You don't sound green at all! I will definitely keep those things in mind and do what I have to get this property!
Hi Newcreation,
Is this the one in Owasso? I am an investor from Bartlesville and have been looking for a while at multi unit in Tulsa.
Currently own 17 SFH plus my own. We are doing Rent to Own (lease option) on most of them. I would be most interested to talk to you about some of these multi family properties. I have strong credit and a pretty good mortgage broker. The less down the better, of course. I can be reached at 918-327-9134 cell or **Please See My Profile**
Thanks
Steve Faulkner