Feasible plan…?

[James Lucero]

Evening everyone, I hope this won't be a very long post but please bear with me. I already introduced my self in the new introductions area so I'll just get right to it.

One of my buddies from college and I are planning on investing in a few multi-family homes (2 3-4 family units to begin with) we would be buying them cash so I figure we'd get some wiggle room on the price. As I mentioned in the intro have worked in my father's company the last few years, in this company we employ around 200 employees, some of them commute 1hr+ to get to work.

Here's my plan

I sat down with the VP and President and told them about how my plan and presented them with this idea: see which long term employees are making a long commute and see how much they're paying for their current apartment (these are all laborers so 98% are renting and do not own a house) They would fill my two starting building with company employees and give them a better price than what they are currently paying and the company would make up the difference to me.

I know that two challenges, among many, are filling vacancies and getting rent on time. I plan on eliminating this by using the company and coming to an agreement with the company and employees (they have granted me a go if it is possible) and the money would be deducted from their paychecks and the company would deposit into my account.

I also heard that a lot of these properties hire a property manager. I plan on eliminating this by putting some of the 20 maintenance workers we have at the company and I would give him a discount on the apartment for him to be the super (these guys are familiar with everything they maintain our 650,000 sq ft warehouse.)

I'm not expecting to become rich overnight but I see this as a good investment and a good chance to create some equity.

To sweeten the deal I would also offer the employees a ride to work (buy a 15 passenger van) for a nominal weekly/monthly fee which would help cover the driver's pay.

Pros:

1. No Mortgage

2. Not worrying about filling with tenants

3. Not paying a fee to a property management company (at least in the beginning)

Cons:

1. I'm a noob to this and I don't know if this is a 100% feasible plan (rent money being taken out from their payroll etc.). I'm in the process of consulting with a real estate attorney and an accountant.

I would greatly appreciate any feedback on how this sounds for those of you with more experience.

Thanks!

JL