I got an email today from my investor partner in Texas. They closed on a $4.69 million apartment building today. He also made note that, because only 9 closed out of the 13 total that were under contract, we fell short of making our mark. His goal was to use up the $9 million for down payment money which, if you do the math, you can use that amount as a 20% down payment for a total of $45 million in property.
And that didn't happen. We didn't make the goal.
In fact, I did the tally today and this is what we were able to close on for the partnership opportunity presented this past November in Detroit. The lowest priced property was $760,000 and the highest was that "Big Boy" deal in Texas at $12.4 million, making my one student a multi-millionaire overnight.
Why didn't 4 of the 13 deals close?
Due diligence issues, as always. When we are in escrow on a property, we do something called due diligence. This is when the appraisal is done, we send out a building inspector, and we have financial records analyzed for accuracy. (It's during the financial records analysis that's when the majority of these deals will fall apart.)
Case in point, on one deal they swore in writing that the property had a 92% seasoned occupancy level. Come to find out that it was a 78% occupancy level which disallowed us from qualifying for the bank financing which requires an 85% occupancy level. So, that property fell out of escrow the moment we found that out.
The other 3 fell out because one didn't make the appraised value and the seller wasn't willing to come down on the asking price, one had a major structural/foundation problem that was beyond what a general contractor (GC) could fix, and one had a termite problem where two of the units had so much wood damage that it would have been more than a gut-to-the-studs rehab job to correct the situation AFTER every tenant would have to be relocated to tent the building for several days to remediate the little wood-eating pests.
I mentioned to my investor partner that we came up short on the goal. He said he was going to go through some deals that were submitted by my students to see if he can find anything worthwhile to pursue in place of those "lost" deals. (So, if you were a student who attended the Detroit event and had a deal "in waiting" then you may receive a phone call from my investor partner if he's interested in moving forward on your deal...if the deal is still available! He has an assistant that double-checks all that stuff.)
If he can't find anything worthwhile in the pile of deals he has that were submitted, he's willing to put up the remaining balance...which will be between $2.5 and $3 million. (I'll know more in the next few weeks.)
Right now, I have 2 other investor partners who are going to be putting up down payment money on investor partnership deals for those who attend my May Vegas 2-day event (May 15th & 16th). One partner is putting up $3 million for MHP deals. The other is putting up $2 million for both MHPs and small apartment buildings.
And if I can get a commitment from my Texas investor for the $3 million then we'll have a total of $8 million in down payment cash for my students who attend the Vegas event. (However, to be clear, I only have a commitment of $5 million so far which means we can leverage about $22 million to $25 million in property (since MHP deals require a higher down payment, typically).
If I get the remaining $3 million, we can add $15 million more to leverage (using the cash as a down payment since this investor acquires multifamily residential-commercial ONLY which typically require 20% down). Again...that's IF he allows me to do this with him.
I have to admit that receiving investor partnership deals, reviewing them, then forwarding them over to my investor is very taxing on both myself and my investor. I have to deal with my students who either (a) want to give me a hard time or ask me every 5 seconds if I had heard anything back, or (b) don't want to submit the stuff correctly and I have to keep sending it back to get corrections done. It's taxing on my investor too because he has to sift through hundreds of submissions, sometimes sending a note back to me for clarification on something. Then, in turn, my student doesn't respond with the clarification points or gives the wrong information...or the deal isn't available anymore.
There's so much involved in all this. And THAT is why I limit this to only those who attend certain select events. I need my students to understand the methodologies of how the program works including where to look for deals and how to submit the deals for acceptance. I know, it's not fair, right? It's not fair that if you don't attend the event, you can't participate in the investor partnership opportunity but...oh, well. It's my show and I can run it any way I want to.
Welcome to the Big Bad World of Investment Real Estate. It's not fair but it can be very lucrative and profitable for those willing to play the game.
If you want in on this investor partnership opportunity, you can't miss Vegas. It's going to be my No-Cash-No-Credit Real Estate Cash Flow 2-Day Boot Camp Seminar on May 15th & 16th.
I have a Spring Blow Out going on right now that gives you basement-bottom pricing for this event (that is the lowest possible pricing threshold) PLUS I'm giving away my brand new No-Cash-No-Credit 100% LTV System (to be released and shipped the first week of May) for F*R*E*E. This course is special because it includes all the legal elements of doing a land trust/contract lease-option deal. This is also why it's taking longer than anticipated to release this course...to ensure that ALL of the legal elements are included and based on the advice given to me by legal counsel.
Here's the link to register for the event: http://www.monicamain.com/spring_blow_out
See you at the top!
P.S. Platinum VIP is already getting full and I barely started marketing this event this week. If you have any interest in having a blast with us in Vegas, sign up for Platinum VIP now. To hold a spot, it's only $100. Call my office now at (661) 295-5050.