Would like to pay for guidance - taking gut job to multifamily.

Question

Fellow Investors - I am seeking someone who has actual experience taking an abandoned property and turning into a small multifamily (10-12 unit). I have been looking for a property for about 6 months now. I started looking for an existing apartment complex that needed TLC. After working with a highly respected broker in Atlanta who only deals in multifamily, realized there is ZERO inventory. So I decided to switch to looking for just a shell property and create our own multifamily. I switched to another highly respected broker who only deals in commercial property - and quickly found there is ZERO inventory of these buildings either. So I have been hitting the streets, driving and contacting owners directly.

I would like to pay someone who has past experience doing this a fair hourly fee to help be my accountability partner in this - for a weekly check in. I am confident that I will eventually find the right property. The biggest struggle I foresee is that I will need a construction loan. I need to have a really solid business case to secure a loan given my lack of multifamily experience (I have only done SF homes to date).

Location doesn't matter much to me, as long as you are in the US. I am a huge Jim Rohn fan and believe that honing my skills, discipline and being of service are the keys to success. Would love to work with someone who has that same attitude towards life. I know you are out there! Thanks for taking the time to read my post! ...Melissa

Greg Dickerson · Answer

I have done many conversions from warehouse, mixed use, manufacturing facility hotel etc. I am currently working on a couple of conversions as we speak. One is Hotel to multifamily and one is a senior living to multifamily. These types of projects are a lot of fun and can generate very good returns but do require serious expertise and the right contractors. You will not have much success finding someone with the expertise you need to guide you for an hourly fee. Just the Architects, Engineers etc. are going to be upwards of $10-$50k depending on the project. This is not like the typical value add or house flip. There are lots of factors to consider when doing adaptive reuse.

Melissa Uppelschoten · Answer

@Brenden Mitchum I think you are right. 6-12 months may be the best timing. Thanks for your insights.

@Azeez K. Great point re: finding the right deal. Patience is not my strong suit, but I think I am going to have to learn it!

Brenden Mitchum · Answer

Hey @Melissa Uppelschoten

As @Greg Dickerson mentioned, MF conversion is a great option here in the Atlanta area since inventory is so incredibly low. I have been tossing this idea around myself as I believe we will be coming into an era in which this will be incredibly lucrative. Many smaller, mom & pop hotels will likely shut down, and many office buildings will be abandoned and foreclosed on. I am not entirely sure about the timeframe but think it's safe to say in the next 6-12 months there will be a number of conversion opportunities if you know where to look.

I'd love to chat with you a bit more about this. If you are interested, shoot me a message sometime and we can brainstorm together!

Azeez K. · Answer

@Melissa Uppelschoten

The MF Inventory in Atlanta is low and priced high where the numbers don't make sense in most "deals".

You have to be creative to find the right fit. I have successfully re-positioned several multi-family properties in Atlanta. I don't think your biggest challenge is a construction loan. The biggest challenge I see is finding the right deal in current market that makes sense. Money is easier to come by given the interest rates being at very low levels. However, finding the right deal and most importantly executing on the deal successfully would be key to your success.

There are a lot of factors that come into play. Execution is key. A good deal can go from hero to zero if not managed correctly and poor execution. Having the right team in place is key to successfully executing on a project.

Feel free to reach out

Steve Morris · Answer

"I would like to pay someone who has past experience doing this a fair hourly fee to help be my accountability partner in this - for a weekly check in. "

Good luck - You had a broker spin his wheels trying to find something that didn't exist for nothing. What if you pay someone hourly and the costs run up to $1000s?

And he doesn't find anything? I'd re-assess your biz plan.

Arn Cenedella · Answer

@Melissa Uppelschoten

Multi family investing is often best as a team sport.

I suggest you consider looking for a partner instead of a consultant.

Arn

Melissa Uppelschoten · Answer

@Greg Dickerson Thanks Greg. I really appreciate your insights. I do thankfully have an architect that has done many adaptive reuse projects. I have enough of a budget to pay for the expertise needed. But it is my job to find the property. I am looking for someone to help guide me as I am locating the property and later to secure the construction loan. I have the funds to purchase the property and to work on the zoning, architectural and building plans.

@Steve Morris Thank you. I am doing all of the driving, looking (litteral spinning wheels):). I didn't have either broker do anything except pull reports for me. What I want now is a sounding board and someone to run ideas by. And if doesn't work out, it will be a great lesson for me. Thankfully all of my past deals have worked out great! So I plan on continuing that momentum. But I sincerely appreciate your words of caution!

Would like to pay for guidance - taking gut job to multifamily.

Would like to pay for guidance - taking gut job to multifamily.

Most Popular Reply

7 Replies