FSLIC Resolution Fund
Has anyone had any experience with the FSLIC Resolution Fund and specifically the Affordable Housing Disposition Program directly under the FDIC?
I am trying to find someone that had an apartment under this program and then converted to Condos. (long shot)
Please post if you have experience with this!!
Thanks
what are you coming in with down? it looks like a deal to me as far as financing. let me know if you need any help, might need a little more then 80% down but would have to look at everything.
Just curious -- how did you come up with Effective Gross Income of $420,725 ?
Lenders will be asking for
Rent rolls
occupancy rate for last yr
Management experience
condition of building( no fixers)
down-payment 20% or more is best but can potentially get 85%
looking for 1.15% or better Debt service coverage ratio
reserves of $100k or more
fixed rates from 7.12% on first and 13% on second to 85% LTV
Good Luck,
Robert
[addsig]
What I would recommend is that you find a real estate investment club in the area & network. You can make some valuable contacts & some opinions from other investors.
It isnt that easy to manage property from a distance. That makes it all the more critical to buy the properties right. I notice that you are from California like me. I had to learn how to remove my California brain from my analysis because everything will look like a god deal compared to here. You have to treat every investment on its own merits & compare carefully with other properties in the area.
Thanks for the reply - that is solid advice. I think that is part of my problem - the buildings here are so expensive (15-20X at least) and when I see these relatively "inexpensive" units for 5-10X gross, I start to salivate. Especially at a 10% cap rate. They are soooo much cheaper that they look inviting. I think I will try and find the local apartment owners association and contact some of their members to get some guidance.
Thanks. Joe
I totaly agree, and I live in NY, downstate NY that is.
no
go to www.rent.com and see if local apartments are renting out at the rates they claim, or if they are marking up
As a broker who focus is investment, my advise is to get as much info on the area, demographics etc...before you make any buying decisions. We are actually seeing quite a few out of state investors. The numbers look good on paper, but as a buyer you have to do your homework. We consult with investors both in the area and out of the area with out representing them in the purchase. So to answer your question there is no free lunch, however, you can get the information your looking for. Good luck and good investing. Tim
Yeah, I think this is pretty typical. Especially in these small-unit motel operations.
The good news is that this means that seller financing and low prices (relatvie to cash flow) are also pretty normal.
In another word, free lunch is seldom served on the silver plate. Why properties in particular aria experience virtually no growth in value while in another they periodically go through the roof under similar economic condition (e.g. low interest rate and high availability of founds) is always followed by specific, often unobvious set of reasons, out of which some are well pointed above. What you should do to discover those facts is exactly what you are doing; asking questions. However, beside the knowledge successful investor has to have the will and proper set of available tools to offset the risk and pain factor built in a hidden opportunity, the majority will perceive as “to much” for their stomach. If you have the time on your hands and are serious about becoming a skillful RE investor, the chances are, you will on occasion turn under managed looser into winner, after you make sure you have conservatively calculated all the risks and available founds necessary to execute your strategy.
Absent of any unforeseen economic downturns in the near future, So CA will always be a hot place to live and own property, even if the market corrects itself. Steady population growth clearly indicates that. If you are looking to leverage available equity in a market more solid then mentioned upstate NY, maybe you should think Arizona, which is only an hour flight form you… or California central valley, which is hotly discussed as a possible pressure release valve to a So Cali RE “balloon”.
I am also in California.
Awhile back I started buying out of state.
I bought a duplex in NC...nothing but problems...needed repairs that were not disclosed, tenants moving out...
I am now in an exchange and bought three new houses out there, I am hoping and praying that they get rented before the first payment on July 1.
I also have a condo in escrow in Gulfport Miss. (huge depreciation benefit from rebuild effort)
and another condo in Knoxville.
It is very scary to buy out of state in my opinion.
You have no control whatsoever.
I am tempted to sell everything and go back to high prices in so. ca.
The deal I am looking forward to the most is a preconstruction condo I bought in Myrtle beach that "should" appreciate about 100K by the time its done in spring 07.
Investing out of state can be done, but not as easily as in your home town. As you determine the criteria for your investments, you must factor in the things that can go wrong. We work with out of state investors on a regular basis (many of them from CA) One suggestion is to visit the area, interview several agents and property management companies. By careful selection, you should be able to find someone that is compatible and that is not just interested in a transaction.
I think what he was referring to when he mentioned 2 hour flight is the “response time” in case there is a problem that require his presence ( e.g. urgent replacement of management company, etc). Let say, if your property is 2 hour flight away you can technically take care of whatever you need to do in one business day while in case of 5 hour flight scenario this would border highly inconvenient if not impossible for an investors with regular job. Otherwise, principle such as live where you want and invest where it make sense is fairly justified.