Apartment complex - Posted by William

Posted by M.P.Graham on September 13, 2003 at 03:25:39:

“Oh well”, this is probably what the lender is thinking when it comes to this plant that you speak of. If the entity or person bringing the plant dies, changes his/her mind, or is defunked or the like. What is your plan for producing these incomes. You also need to create an exit plan as well as multiple avenues for fullfillment of debt(s).

Good luck & Best Wishes,

Apartment complex - Posted by William

Posted by William on August 27, 2003 at 22:40:39:

I am in a bind and need some advice. I have been looking for motivated sellers and found them by the hundreds. I have three very large deals that I have been negotiating on and finally reached agreement on one and now I am in a bind. The owner of a 32 unit complex has agreed to defer down payment till I am able to achieve refinancing. He has also agreed to accept a promisary note for the rest of the payment with 8% 30 year amortization on a 7 year balloon. I have located a buyer who has cash and is willing to buy 4 of the units that are in a seperate building for $48,000. The owner also specified that I need to have a life insurance policy in force for the $435,000. He is also wanting me to go ahead and get prequalified for refinancing. Here lies the problem. I had the realtor that had the listing to call around, he of course wanted to meet the stipulations to recieve a commision, and find a bank that deals in real estate commercial loans. The President agreed to meet with us and so we went. The president was very impressed because I came prepared. He had already gotten all the paperwork on the apartments he was requesting. I walked in with numbers ran showing that the apartment complex with the present rents ,which are low and will be raised once some paint and other things are done, would support a loan of the appraised value once it is repaired. I ran very conservative numbers expecting that to be what the bank would do. My numbers were more conservative than theirs. Then I ran into my problem. I am hungry so I jumped on anything that acted like a motivated seller. He wants my personal cashflow and everything. He of course thought with all the knowledge I had that I must have other properties and said that would help. I explained that I had just started investing and had low capital and low assets. In fact besides a payed off car I have nothing. I was an independant life insurance salesman and did not like it as much as real estate so I stopped. I still service my business written but do not have a steady income stream. I have poor to bad credit, and am young. It is hard just starting out but I would say it is real hard when you are just starting out at everything. I need advice on what to try to negotiate or where to turn for money and anything else that would be helpful. The cashflow on the property is as follows. $7970 at full their is about a 8% vacancy factor but I run it at 10%. management company charges a 10% fee. The mowing and repairs is about 5% but I have been running it at 7%. Insurance is $1000.00 monthly as of now but I have checked and with the installation of fire extenguishers would drop at least $150.00 monthly. It will appraise for at the least $600,000 and the appraiser said if the inside was clean which it is it would go $675,000 as is. We are being conservative and saying that with siding and cosmetic things it will go $725,000. The biggest thing working for us is that their are not very many apartment buildings in the small town and there is a plant coming in that will hire 7 counties worth of work force. People drawing unemployment that are skilled labor. This means a big population boost real close to the part of town that we are in. The rents are ranging from $225 to $300 on the one and two bedroom apartments, the rent in the other two complexes is $300 to $375. If there is any more information needed or any advice please post it .

Re: Apartment complex - Posted by jackNJ

Posted by jackNJ on September 08, 2003 at 06:09:16:

I too have very little experience in this, but it would seem to me that you should consider taking on a partner with a successful history for your first deal. That will give the seller what he is looking for and will give you a first hand look at how it is done. Of course you would be sacrificing some of the profit, but the value of the education you receive will likely be worth it. Good Luck.


P.S. How do you find motivated sellers by the hundreds?

Re: Apartment complex - Posted by Charles

Posted by Charles on September 02, 2003 at 11:27:37:

I would like to know your secret of finding properties by the hundreds?


Re: Apartment complex - Posted by Cas

Posted by Cas on August 28, 2003 at 17:49:12:

I have been looking for motivated sellers and found them by the hundreds.

Hi William,

I apologoize for changing the topic a bit. But could you please tell how you are able to find motivated sellers by the hundreds? What techniques/ strategies do you use ? What magic are you working ? (lol)


Re: Apartment complex - Posted by Shell Poust

Posted by Shell Poust on August 28, 2003 at 14:02:28:

Also add in property taxes and sewer,water,garbage and
etc…landlord usually pays these expenses
What is your plan; fix up and resale or hold for cash flow?

Re: Apartment complex - Posted by Jay

Posted by Jay on August 30, 2003 at 22:39:46:

Right, how do you find motivated sellers by the hundreds? Whats the trick please

Thanks :slight_smile:

Re: Apartment complex - Posted by William Robins

Posted by William Robins on August 28, 2003 at 15:44:57:

I have added in taxes and everything, my plan is to fix up and hold for cashflow. When the plant comes in and rent is at its highest, I will then put it on the market for an inflated price if it sells good, if not oh well.