Starting 2019: It’s The NOI

While it has been a while since our last posting, 100K Investing, LLC, has been keeping very busy. For 100K Investing, LLC, what we focus on is NOI, or the positive cash-flow, in our deals.

Our purchasing process

We are focusing strictly on commercial deals–not apartments or mobile/rv parks–but commercial deals. The can include medical or assisted living facilities, retail shops, or just about anything that is positively cash-flowing. No distressed deals, land, notes, or construction/development projects.

We (currently) finance entirely through a combination of 3rd party financing (bridge/HML) and seller financing. We look for deals between $100K – $3M. Real estate must be for sale, as part of the transaction. It doesn’t need to be part of the sale, but it must keep the transaction to within $3M. Our lender requires to be in first position.

We offer terms, when we make offers to buy. The NOI must justify the purchase price. The NOI must be able to pay the seller financing, the interest on the HML, and pay the refi. On the refi, on average, it must gross $15k/mo, or $180k/yr. We will verify the finances during our due diligence phase.

When the due diligence phase is complete, we can fund, on average, within 5 days. Prior to this, we will need a BPO/appraisal of the building. If you don’t have one, completed within the last 9 months, we will order one.

We would like to know what the sellers’ tax strategies are. When selling, the amount of money the seller will receive is a large windfall. We focus on two options, regarding the seller financing, based on the sellers’ goals. We can either continue the seller financing, for the duration of the time it takes to fully pay off the seller, thus keeping the amount of tax they pay in any one year lower. Or, after a period of 12 months, we refinance the seller note, paying the seller in full. We can use whichever method works for the seller.

JV/Partnering Up

As mentioned above, our lender requires a first position. If you aren’t willing to take a junior position, we may not be able to work with you. If you have a self-directing IRA/SoloK, Home Equity option (Loan/Credit/Sharing), and are not concerned with “position,” so long as you are paid a return, we can be flexible. Note: our financing is interest only payments, so any deals we work on must already be positively cash flowing, to cover the interest payments, from the beginning of the transaction.

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