RentalStarter - A Midwest Real Estate Investment Company - page 26.

Swordsoffreedom

legendary

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Quote from: Branny on April 22, 2014, 02:01:59 PM

Quote from: thehun on April 22, 2014, 12:50:53 PM

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Some areas of the US are like that, however the area we are in has median rates of 10% , and that includes large, inefficient multi-family properties bought/sold for retail pricing.

I think it really just depends on how you optimize your land use and region, finding the most efficient return on equity requires thorough research and analysis of the area. The US housing market is a nice one to look at resource wealth going back a few pages and all the other factors that can make property values soar.

Branny

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Quote from: thehun on April 22, 2014, 12:50:53 PM

I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Some areas of the US are like that, however the area we are in has median rates of 10% , and that includes large, inefficient multi-family properties bought/sold for retail pricing.

thehun

legendary

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I'm quite impessed that such high ROIs are possible in the US housing market. In most places of Europe you would be happy to get a clean 6-7%, and that's counting on the good faith of your tenants (laws tend to bend very much in their favour and evictions are complicated, slow and costly)

Branny

sr. member

Activity: 406

Merit: 250

Deal review :

4br , 1bath
1600+sf
Built in 1900
Garage/Barn combo in back yard
Nice 0.22ac lot (890sqm for you non-freedom unit people)
$36,900 asking price
<$6,000 repair cost

$750-$850/mo in rent (We'll get $850 if we go section 8 since it's a 4br)

I think we could negotiate it down a bit, but at full price & full rehab it would provide 20%-23.7% simple return.

Branny

sr. member

Activity: 406

Merit: 250

Quick update(s).

Met with contractors on Mill (Actually helped out for part of a day doing drywall). Lots of progress but lots of problems have arisen from the original scope of work. Still under budget (Thankfully) and all the material is pretty much paid for already so hopefully we'll be a little under budget or right at budget. We did a GREAT deal of wiring work that wasn't originally planned.

Logan's renters contacted me last night and asked if they'd make rent payment + overage surcharge if we would let them stay. So, either Monday or Tuesday they're supposed to make rent payment to avoid eviction proceedings and whatnot.

2-3 properties are on the market that meet our criteria however I want to wait till Mill is done before we follow up on looking at more properties.

Also, as a general housekeeping note the deed transfers over to the LLC (Directly) will be done this week finally.

Branny

sr. member

Activity: 406

Merit: 250

Quote from: pascal257 on April 14, 2014, 06:38:15 AM

Was the acquisition communicated and decided by the shareholders or on which paragraph of the contract is this based upon?
Also I was wondering how the IPO share price and count was determined.

We had originally filed a pseudo-PPM laying out the various rounds of financing on havelock. Page #16 of the business plan also outlines the funding goals and the like for the business overall..

Divs will be announced today as well.

pascal257

sr. member

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Was the acquisition communicated and decided by the shareholders or on which paragraph of the contract is this based upon?
Also I was wondering how the IPO share price and count was determined.

Branny

sr. member

Activity: 406

Merit: 250

Quick update.

Mill street is still in progress. Ended up having a water main break that we're having to attend to now. To this point we're under budget, even with the water main break we still expect to hit or be under budget. All material has been paid for on Mill, only big(ish) expense now will be getting a jackhammer & maybe backhoe to dig up the water lines.

Mulberry is just waiting on the rehab team to finish up at Mill. Some material has been purchased for this property.

Logan's renters still haven't paid yet, i have been workign with them on this issue and do believe we'll be paid soon.

Chris_Sabian

legendary

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Quote from: Branny on April 09, 2014, 07:17:25 AM

Quote from: jrlichtman on April 09, 2014, 07:06:38 AM

Wish more of the Havelock-listed companies were this transparent.

If you had big plans like we do, everyone would at least try.

The endgame is to get bigger and bigger, getting to the size I want in the next 5 years ($15m-$25m) requires a framework that would allow for compliance with several governmental agencies. So, we can either try to be transparent up front which will make it easier, or deal with sticker shock down the road. It'd be better to pay the price now while we have ~$500k of assets and not $5m.

That sounds like a very good way to conduct business.

Branny

sr. member

Activity: 406

Merit: 250

Quote from: jrlichtman on April 09, 2014, 07:06:38 AM

Wish more of the Havelock-listed companies were this transparent.

If you had big plans like we do, everyone would at least try.

The endgame is to get bigger and bigger, getting to the size I want in the next 5 years ($15m-$25m) requires a framework that would allow for compliance with several governmental agencies. So, we can either try to be transparent up front which will make it easier, or deal with sticker shock down the road. It'd be better to pay the price now while we have ~$500k of assets and not $5m.

jrlichtman

full member

Activity: 141

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Wish more of the Havelock-listed companies were this transparent.

Branny

sr. member

Activity: 406

Merit: 250

Flight ended up being canceled due to aircraft issues. Will have to try and figure a way to get this taken care of in the next few days.

Branny

sr. member

Activity: 406

Merit: 250

Quote from: mutex on April 07, 2014, 03:49:26 AM

Any news on the CREI acquisition and future plans? Have you had a meeting with the guy in person?

Planning on flying down there tomorrow to meet him. If all goes well we'll fund his first property this week.

We also are closing on property #6 at 1:30ish today. Already got the HUD from the title company, last appraisal from what i can tell would have come in at $66k or so on the property we're buying as the seller owes $55k on it. The contract was for $39.9k + they are required to pro-rate April's rent along with sending us all deposits, this ends up being over $2k.

mutex

member

Activity: 99

Merit: 10

Any news on the CREI acquisition and future plans? Have you had a meeting with the guy in person?

Branny

sr. member

Activity: 406

Merit: 250

Quote from: ex-trader on April 05, 2014, 07:25:22 AM

Quote from: Branny on April 03, 2014, 03:27:18 PM

Found a older landlord wanting to liquidate quite a few properties. We don't have anywhere near the cash to buy them.

Whats the gross yield and the net after the costs of running them. Might have an idea......

Gross income is $4500/mo , cost might run at most $750/mo without setting aside money for repair escrow.

Kind of thought about asking to do seller financing w/ substantial down payment. Kind of shying away from that right now because to do it right we'd just about do all our liquid reserves.

ex-trader

sr. member

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Quote from: Branny on April 03, 2014, 03:27:18 PM

Found a older landlord wanting to liquidate quite a few properties. We don't have anywhere near the cash to buy them.

Whats the gross yield and the net after the costs of running them. Might have an idea......

andyfletcher

newbie

Activity: 31

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Quote from: Branny on April 04, 2014, 10:07:49 AM

With all the crazyness of NeoBee and the market as a whole, I'm going to start the process of hiring/setting up liquidation agrements in the case of personal demise or disappearance of the issuer (me).

Very good idea and should add to the security of the investment.

Andy

Branny

sr. member

Activity: 406

Merit: 250

With all the crazyness of NeoBee and the market as a whole, I'm going to start the process of hiring/setting up liquidation agrements in the case of personal demise or disappearance of the issuer (me).

I'm talking to the atty right now about what needs to happen, but it would likely be the election of a POA (Most likely an attorney) who would be able to call a special shareholder meeting in case I lose contact with havelock and the shareholders in general.

This would cause all property to be automatically liquidated in the very best possible method which would recover most shareholder investment. There's also a very significant chance that the payout would be higher than the total investment due to the simple fact that we have so much equity in properties.

I'll keep everyone updated to the progress but actually plan to have everything set up by the end of the day. These kinds of agreements in the real estate world are stupidly easy to conduct.

Branny

sr. member

Activity: 406

Merit: 250

Found a older landlord wanting to liquidate quite a few properties. We don't have anywhere near the cash to buy them.

But, we do have enough cash to make (IMO) a pretty attractive seller-financed offer. Will go look at them tomorrow, maybe we can work something out.

Branny

sr. member

Activity: 406

Merit: 250

Most say not enough payment history, they also don't like the fact that I'm not making enough personally to pay back the loan (The first bank indicated that they didn't take the rental income into consideration at all).

Right now we own say around $450k worth of real estate once it's all rehabbed, we've put $300k into it all. We may be able to lend up to 70% of this number. We also will bring in roughly $6300/mo , with about $4500 being usable (Repair escrow, taxes, insurance deducted).

So for the loan - $450k * 70% = $315k

The resulting payment will be $2573/mo which will knock us down to $1,927/mo in free cashflow, BUT we'll have $315,000 more to spend on more properties. If we then went out and repeat the whole process, we would then purchase enough properties to then bring in an extra $4500/mo free and clear. This would put us over $6k/mo in free cashflow AND of that mortgage payment nearly a thousand dollars per month is going to loan reduction. So, in reality our interest payment is roughly $1200 per month which is unrecoverable interest.

Topic: RentalStarter - A Midwest Real Estate Investment Company - page 26. (Read 120408 times)