Scaling Up - Where did you START?

Question

I'm looking to get out of flix/flip game and scale up from our office 5-plex. 8-20 units is where I want to start to scale up and move forward.

In the small town I'm from, between Houston and Austin, there are apt complexes but none that are selling. Most possible is a hotel conversion.

-Where should I be searching? (Loopnet, CBRE, HFF, ARA?)

-What systems do I need in place BEFORE purchasing the units? (Prop. Mngt)

I understand I will not be syndicating for multiple reasons, but where did you start?

Brian Adams · Answer

@Peyton Leal good to meet you.Hopefully you can get a nugget or two out of this link on how I got started.I quit my CPA Job to buy Large Apartment BuildingsGood luck on your journey.

Hadar Orkibi · Answer

@Peyton Leal My first comment will be Education. start there. in addition to that look at your financial situation to determine where you want and Can go..?Research and Chose one market.Start building relationships in that market: Brokers, Property Management, Investors, REIA etc. Create a Funnel for deal flow. Make offers.

Greg Wright · Answer

@Brian Adams Is the real deal and I wouldn't have been able to accumulate the properties I have without his inspiration more than 7 years ago .... Thanks Brian

Salvatore Lentini · Answer

@Peyton Leal - Loopnet has worked for me. I know others say it's a place where deals go to die but I found a commercial building with a triple net tenant and a development lot and after negotiating got 40% off the asking. It wasn't a deal at its asking price but it certainly was at the purchase price :) I closed on it earlier this year and I'm VERY happy with the property. Another was on there overpriced by $1M+ (can't say how much because I'm still working on it) but found out they were just shooting for a pie in the sky number. In talking with them they are more realistic and if I get it at the right price and stabilize it it will be a homerun. Not a fan of CBRE or any of the really big brokerages. Mostly because you need to have a tight relationship so you get their deals first. Hopefully I will have that relationship someday but for now I work with individual commercial brokers and have done several deals with them. The best way to find deals is through networking.... with EVERYONE. Literally everyone.

Jordan Moorhead · Answer

@Peyton Leal search everywhere but get out and meet brokers that work in that space. You need financing, property management, contractors and maintenance in place before you get going. Really explore financing options as they aren't as cut and dry as residential financing.

Account Closed · Answer

Based on the info provided I would recommend you first start speaking with brokers. Brokers will have "pocket-listings" that they consider off market. Typically a few brokers will control the majority of the market. Once you start making calls and researching a bit you will start to see which firms are top notch. Note that realistically, these listings are not "off-market" in the sense that they have been shopped around to other preferred investors, but a lot of this depends on timing. A good deal could come across your lap. Additionally, good brokers can help set you up with some of the key partnerships you will need (mortgage broker, property management, insurance, etc.). Another even better resource is finding local investors in your area. I personally think networking and building these relationships are the absolute best thing you could be doing, but it will take more time to naturally build. I am from Houston. If you are ever in the area feel free to PM me. - JA

Peyton Leal · Answer

@Jordan Moorhead Will do! Our accounts are with BBVA Compass. Celebrating In Austin?

Jordan Moorhead · Answer

@Peyton Leal I actually just bought a 2 unit in East Austin and will be down there next Wednesday! Reach out to the big banks too, US Bank just financed 18 units for me with decent terms.

Peyton Leal · Answer

@Salvatore Lentini Thanks for the insight! That’s how I feel right now and all Keller Williams agents/teams have actually helped out (especially me foregoing my commission to them). I like LoopNet and 100% agree on the establishing the relationships to gain credibility and access.

Peyton Leal · Answer

@Jordan Moorhead Thank you Jordan. It’ll be new Beast to tackle. Property managment and contractIng we have. Have a portfolio lender in mind, few PMLs, and potential line of credit. Btw let me know if you are ever in the area. If I get any decent leads in Houston/Austin I’ll reach out!