All Forum Posts by: Abel Sng

@Brandon S. partner up with someone that has MF experience and track record and you can piggy back on them for the loan. A lot of MF sponsors start out that way!

@Jeff Greenberg sounds like your lender held you a gun point! Hope you never use them again! How big was the deal? Sounds like you went through a local lender and not agency debt?

@Ken P. are you planning on using a property management company? At 150 units I would highly recommend it. If so, make sure you interview a few and ask MF brokers in your market who they would recommend. Each property management company will run their operations slightly different so once you've landed on one you should ALWAYS get their input so you can avoid surprises.

As for the Midwest, I don't have experience in that market, however in DFW and ATL I always underwrite for around 1200 a unit for payroll all in. That could go up or down but it gives you a good starting point. You are correct for not using the sellers numbers as there are many times we see P&L's that have payroll at around 700-800 a unit which means they are either self managing to a certain extent or there is not sufficient staff in which case you could see a higher repair and maintenance / contract services cost. 

@Charles M. my group is investing in ATL and closing on a 284 unit prop in Stone Mountain tomorrow. As @Joseph Gozlan the best ways to "partner" is to bring solid off-market deals and/or equity. Most experienced syndicators have a network of brokers that send them deals off market or early access however the more the merrier. 

Becoming a passive investor will give you access to the inner workings of the process and the sponsors. This however assumes you have at least 50K to invest (typical minimum) and are an accredited investor/sophisticated investor depending on the requirements of the sponsor. 

Additionally, my advice would be to think of any way you could provide value FIRST. Think of what you can give before what you're going to get. If your goal is to work with someone experienced think about what they would want in their position. What would they gain by "partnering" with you if they already have all the pieces of the puzzle? Ask what they spend most of their time on or their bottle neck in their deal process and how you can help alleviate that step. Your main goal early on is to educate yourself if you have no experience. Offer to be an "intern" before you think to "partner."

Good luck!

Are you going to be self managing? If not your prop manager should be able to pull comps for you and give you feedback or at minimum the seller broker should be able to (take it with a large spoonful of salt). Once you've drilled down on paper who your comps are then drive around and shop them to check to make sure your comp survey was accurate!

Good luck!

@Michael Le summed it up. $250-300 per just what the bank will require you to escrow for replacement reserves. That # should be a bare minimum and really shouldn't dictate how much you raise for your capex budget. Before going into a project make sure you have done your due diligence on how much you should raise for capex for your intended hold period to accomplish your business plan.

@Jeff Garrett - @James Eng and Paul Peebles are pros and I can highly recommend them as we recently used them to close a 100 unit prop in ft. worth.

I would echo what @Chibuzor Nnaji said. It's easier to provide value and join a team than to build one from scratch if you have no experience. I like to think it's better to have a small piece of a big pie than a big piece of no pie.

Good luck!

Robert - I started in MF less than a year ago and about to close on a 284 unit prop this Friday. My advice is to link up with those that are more experienced than you and provide VALUE. I always try to think about ROT (return on time) more than ROI. Can you provide those around you with a greater ROT than they could do alone?

What are the pieces of the puzzle that you do have? Can you underwrite? Find deals? Find equity? Once you find out what you have to offer you'll be able to put all the rest of the pieces together. Remember that MF is a team sport!

Good luck!  

Is there a reason why you're having to put 40+% down? How's the loan being structured? If you like the location and you think there's upside then I would try to decrease my down payment to bump up my CoC return.