Reasonable Ask for my skillset and money on MF deal?

[Darwin Crawford]

Hey there,

So I'm reading everything I can in this forum, (very very helpful btw) and have come to the conclusion that I would like to try and put together a close-to-home apartment deal on some smaller (4-16 unit) multifamily buildings in my local area.  

I have a personal conviction at the moment about local investing, which is based on some experience managing my small portfolio of SFR's and condos.

Some background - I am a former construction/millwork/welder dude, have run a couple of my own businesses, and got into landlording about 14 months ago.  bankrolled by a family member, have 5 units in 4 properties owned, 2 mortgages, and a track record of profitability.  I am currently personally un-bankable, so deals have to come from cash, partners, or their own financial merits. 

Coming from the construction world, there isn't much that I can't do on the 16 unit and under buildings.  I still own a lot of my equipment, and have graduated to "finger pointer/organizer/budget manager/a-kicker".  Believe it or not, I actually enjoy the day to day running of places, working with my hands and head and iPhone, and making properties better.  Like I tell all my subs: "I can do your job and keep the money if you screw it up, so don't make me prove it"

My duplex is in escrow, and will net me about $75K in cash, which is all I am going to have to bring to the table, along with my skill-set, 10+ years of knowledge, and track record (albeit a short one) of 10+ cap rates in areas where everyone else gets 6.  

I am focusing on an area of scottsdale that I would describe as the proverbial pimple on the proverbial backside of my part of town. Its full of 60's-era block multifamily units, and surrounded by C&B grade apartments, starter condos, and some SFR's. Current properties, except for 2, are run-down, poorly-maintained, disgusting, and have everything from working class immigrant families to meth-heads. If you take the part of town I'm in, and consider it a "block", this is definitely the worst house on the nice block, so to speak.

The drawback of my area is that dirt is expensive, and seeing 10+ cap rates based on price isn't going to happen.  This is a 6 or 7 play at best, with appreciation as the icing on the cake.  It won't happen overnight.  

I would like to either raise money, or take on some partners, and I'm asking (pleading just sounded bad..) for some ideas on deal structure.  I have cruised the area in question daily for the past year, and am about to start direct calling landlords to see who wants to sell.  I know, without a shadow of a doubt, they have headaches.  

Based on some hypothetical math, I think that buy/reno budget on these places should be about $75k/door (purchase price + construction) and will rent for $500/door per month.  As the neighborhood turns, rents can and will go up.  So call it a cap-rate-turned-land play.  

I'd like to be paid for finding, managing, etc, and don't feel that it is an unreasonable attitude.  

Anyone ever tried this?  Got a good success or horror story ending?  Suggestions?  I am well aware that the first one will be the hardest, and don't mind the hustle.  

[Brad Freeman]

Been doing it for awhile.  I would guess you would have to prove yourself first?  But ultimately there are people everywhere that want to invest and have cash.  What many people lack is finding deals with enough of a discount worth doing.  Find a deal (deals) and you bring value.

I guarantee nothing...just produce results!

I never hold anything.  I just get in and out as fast as I can, and if someone wants to fund me, then I split it..otherwise I just do the deal myself.  Never lost a dime in 15 years.  It's all about how low you can buy it for.