#002: Finding the Deal

Brandon Braegelmann, my son and Project Manager for our Puerto Rico business Kensington Fund. In the interview we discuss a deal Brandon found, how to finance, re-hab and sell the property successfully.
SHOW NOTES
0:44 – Background on Brandon and what he’s working on in Puerto Rico.
2:05 – Information on the property Brandon found; general location, possible uses, and details on the units.
5:06 – Rough estimates on costs for upgrading the property to get leased up.
7:36 – Other small issues and background on the building.
8:13 – Asking price for the property, activity on it, and information on the seller.
9:43 – Projections for offers and possible rental income; differences between calculations for income properties and personal residential properties.
14:08 – The numbers being used for analysis on the property and possible incomes and expenses if rented as an Air BnB.
17:10 – How utilities may factor into the income and expenses.
17:36 – Estimating high level numbers to examine the potential of the property and why that’s valuable to do early on in the analysis.
21:35 – Some specific differences in the calculations between income and personal properties.
24:17 – Defining cap rate for a property and the “1% rule.”
25:43 – Different forms of financing and how they may apply to this property, including FHA and some creative financing options.
27:17 – Defining subordinate seller carryback and how it can benefit both parties.
29:34 – More possible financing options available for this potential deal.
33:04 – Making initial contact with the selling agent and goals for the call.
36:54 – Going through descriptions of the property and details on the interior and exterior to assess pros and cons.
47:21 – Talking with the selling agent about the property and background on the seller as well as the property.
50:14 – Pitching the selling agent on some creative financing options.
56:28 – Steps for moving forward with the selling agent on this deal.
57:24 – Some general details on property taxes in Puerto Rico and an estimate for this property.
59:26 – Reactions to how the call went and thoughts moving forward; identifying every possible objection the seller may have and addressing them out front.
1:01:55 – The value of having real estate investment experience behind the deal; next steps for the deal.
1:02:51 – Addressing the commission aspect for the selling agent to make sure he’s compensated
Resources and Links Mentioned:
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