Underwriting Gangsters

Oh no, come here, come here. Alrighty, let's get to it. Hi little guy. Let me go ahead and hit record. Hey, we gotta see you in the camera. Oh, scoot over, we gotta make sure you're in the view. All right, let me Welcome back to another episode of Underwriting Gangsters. We have two of my favorite little employees, Hudson and Beckham. Welcome to the show. Say hello to everybody. Say hello to everybody.

Hello, everybody.

Good job. All right. So we're actually going to be finding some on-market deals today, and we're going to underwrite an on-market deal. So I'm going to go to the good old Zillow, and we're just going to look for an on-market deal. So I'm going to look at Indianapolis, Indiana. Hey, and I'm actually going to type in seller financing. So that's a very, very easy way to find creative finance deals. So I'm going to type in seller financing with one arm, apparently. Seller finance. Can you say seller finance? Yeah, say seller finance. Okay, he's a little shy today. Can you say seller finance? Yeah, that's exactly what we're doing. All right, so what do we got here? We got Shadeland Avenue. Let's look at seller financing available. All right, let's underwrite this deal first. I want to make sure I don't have this deal already in my system because that is a possibility.

No, I just tried that.

Oopsie.

Okay, I don't actually have this deal, so that is a good thing. So let's go ahead and underwrite this deal. So I'm gonna hit start underwriting. Actually, one second, I don't— I want to make sure the agent information is not visible, so let me go to my settings.

Poopy!

No, she's not!

We're not starting this again. All right, so let's underwrite this deal. Nope, hey, we're not doing this again.

You're gonna be, you're gonna be sitting in the chair if you're gonna do that. She's done! Yep.

Okay, you gotta keep your hands to yourself. We need to change the mic setup for this show. Okay, so I'm gonna hit Zillow and it's gonna pull in the relevant information for me. Yep, you want to push the button? Oh, okay, so we already actually have this deal and I marked it as dead, so I'm not even gonna underwrite this deal.

Okay, okay, you hit him in the face with a microphone.

Now that's not good. Hey, we're gonna have to pause the show.

Come on, come on, let's go.

I told you to stop messing around, and that's what you did.

Okay, you should be a big boy. Okay, we'll come over here until you're done crying. We gotta stop. Okay, okay. Okay, do you want to go upstairs and be by yourself? You don't have to be on the podcast. Okay, you don't need to be on the podcast.

Okay, we are down 2 employees today. I have a feeling that won't be the last, uh, bruise that they incur on this show, but, uh, all right, well, let's go ahead and find another deal to underwrite, so Let me share my screen with you guys online. Cool. So we're going to find a different property to underwrite. We're going to look— see, the problem is I feel like I've probably looked at a lot of these. So we're going to go and see what this looks like. Seller financing may be available with a strong down payment. Perfect, that's what I love to see. So we're going to see, test our luck about underwriting this deal. I'm not seeing it pop up, so let's see if it's in our archived at all. Okay, that one's archived too. So we need to find some new ones that we haven't underwrote that are just completely dead. Um, let's see, or we could find a different market altogether, which I may just go and find a different market altogether if I don't, um find anything here in a second. Okay, cool, we can use this one. Perfect. All right, let's check out the listing to see if they're even open. 122 days, seller is not open to seller financing. Okay, well, that makes sense. Uh, that's the thing with Zillow is a lot of times where it'll pick up in the seller financing but it's not actually available. I'm I'm gonna go search a different market. So let me— let's search Austin, Texas, for example. Let's see what we can find there. Seller finance. Oh, these some big, big homes here. Yeah, I don't think any of these are going to pencil out as far as LTR. Uh, let me pick a different market. Let me go to Columbus, Ohio. You have a popsicle, a lollipop water. That's actually pretty innovating if you ask me. Are you also extracting the water out of there? Dude, I think we just invented a new straw.

No.

Very cool. All right, let's take a look at this, see if we can find any seller financing deal.

Buy it.

Owner financing with 20 to 30% down. It's probably going to be hard to pull this back in the search. I feel like I've looked at this deal too. But we'll see. This is going to be Columbus, Ohio. This may not pull any results of the Zillow because of the dual address.

That would be— that would be—

that—

that one, because that one—

I see that, I see that. Okay, well, that clearly didn't pull the right city and state, so I'm just going to add this in manually. Okay, so we got $198,000. All right, cool. So we got property taxes. We're gonna see if it has any estimate. I can open up like Deal Sauce, something like that, but for right now we're just gonna use this. $2,279. And then I'm just going to put in just an estimate of about $1,800. So I'm seeing a lot of my policies renew right now in that $1,700 to $2,000 range. All right, so let's take a look at this. We're going to have to look at monthly rent. Um, it's probably not going to be able to pick up the right address based on that. So I'm actually going to look this one up manually on Renometer and get the LTR address.

Mm-hmm.

Mm-hmm.

Mm-hmm.

All right.

Mm-hmm.

Yeah, it looks like that's— Renometer's having a hard time picking up that address too. Let's see. Hmm, maybe we'll try that. We'll see if it gets picked up.

That's it.

Is this a— let's see, is this a duplex? 7-bedroom duplex. Okay, so one's a 3, one's a— this is actually going to be really hard to comp, to be honest. Uh, based on that, it's a 3-bedroom, then it's also a 4-bedroom, so we need to look at 4-bedroom comps. So it's about 2 to 3. It's, uh, what did the system pull up here? That's probably not too far off if you really combine it. You ready? Are you ready to be back on the podcast? Okay, all right, all right. Remember what we're not gonna do. We're not gonna touch the microphone, okay? Because you hit him in the face with it, remember?

That's so big.

Yeah, it's very heavy. We don't hit people and we don't swing it because it can hit someone.

Mommy, all right, so what would I do in this type of offer?

I would do— I would start off with 30%. And if I look at how this is structured, I don't love the structure of this at the moment, so I would probably do— I mean, obviously I would love to start at 10, but I just don't know if that's realistic. Very cool. We're probably not going to land at 10. It's probably going to be more like 8. But I don't like how overleveraged this is, but there's not enough meat on the bone as well. I don't think refinance— it'll probably be around like 1%, not 3%, so that'll, that'll help a little bit there.

What's a geek?

Hmm, it's a little too overleveraged at the moment. I still am not loving, loving the numbers here, but I think this is enough to at least have a conversation as a starting point. So I could also— we need to get the agent's information, but I could also just call them and see what they're interested in. But I can't do that with kids screaming in the background, unfortunately. So we're not going to on them today on this one. What's up? What happened? Oh, it's okay, we'll change it in a little bit. Okay. All right, so as far as making this deal work, I mean, from a cash flow perspective, I mean, obviously that's— yes, cash flow— that would— this would actually be a pretty strong deal, but I don't want to be like hyper-aggressive on the comps here. I'm going to say, let's just say probably $1,700 on each side. So we're going to do $3,200 and kind of just see what that looks like. Even that, I mean, would still be pretty strong if we're able to generate that much cash flow on this kind of deal. We're definitely not— the seller's not going to take a $100 monthly payment. So we're going to have to come up with something probably a lot stronger. I want to say at least in that $350, maybe $400 range a month. So we can plug that in. And actually, because we have a stronger monthly payment with debt paydown, that actually makes our leverage position a lot lower over that 10-year, 8-year period. So this is actually turning into a pretty decent deal here based on this type of structure. I would like to have a little bit more in the surplus. You can see based on my buy box, that's an 82%, which is normally— that's the, that's the buying range for me. So I think this is a good deal. Hey, do you like this property?

Yes, I like a bunny property.

You like a bunny property?

Yes.

Okay, what about you? Do you like this property?

Yes, I want to pick out a bunny. I want to pick out the bunny.

You want to pick out the bunnies? I don't see any bunnies.

Property.

Okay, we'll pick out the bunny at the property. Let me just look at the condition. I don't know what's going on with the blinds. Um, is that supposed to be some design? This is very interesting. When was this built? I feel like this is an older home. No information. Rented for $900 through September 2026. So it looks like my ability to increase rents is going to be a little tough. So you might have to— if it's so underpriced, my guess is that there's some work that needs to be done. For this. And then if you see here, rented in the past for $2,800. And so if I'm over here with my comps, let's see, at $3,200, I probably need to be more conservative at what this deal is actually going to produce based upon, you know, their own estimates that they're providing. So I think this is probably a pretty fair starting point to work off of. Looks like I already saved that. Um, so yeah, I mean, overall I think this is a pretty decent deal and it might be something that I reach out to. So guys, you want to— we're ending, we're ending the episode, you gotta sign, you gotta sign off. Hey, we're ending the episode, you gotta sign off. They're not signing off. I'm signing off. I will see you guys next time. See you later. All right, stop the recording. Oh my goodness, did I ever start the recording? Oh yes, I did. Okay, cool. I was worried I never started the recording. Perfect. Okay, that's done. Alrighty, well, I will be back at 10 without kids and I will be doing against the clock, and I will be cranking out as much work as I can. And you'll see me underwrite deals and sending out offers and moving the needle forward for today. So I'll be back here in about 30 minutes.