All Forum Posts by: Marc C.

Yeah, I do support the proposal to allow businesses to expense capital purchases. (We already can expense up to $500,000/year under Sect. 179, but it's supposed to be for "equipment"..."All businesses that purchase, finance, and/or lease less than $2,000,000 in new or used business equipment during tax year 2017 should qualify for the Section 179 Deduction."). 

Haven't seen it tied to 1031 rule changes, though. 

 Holy Smokes! That's significant! 

> Many investors also would just simply not sell if they had to incur taxes, so it would hit the real estate market hard.

Yeah, it would certainly slow down sales. YIKES! is all I will say in addition. 

There is absolutely no reason you can't syndicate a deal as your first one. I did.

Are all the investors are in the same state as the property? You might be able to save a lot on legal fees by following your state's Intrastate securities laws and skipping the SEC-compliant stuff. 

Will all investors be involved in making decisions about the investment? (Member-managed LLC.) If so, it's a Joint-Venture and no securities are being sold, so securities laws aren't relevant. (per Gene Trowbridge.)

In addition, companies like www.regdresources.com will produce all of the legal docs and Form D (except the LLC operating agreement...still have to go to your guy for that) for $5500. And the docs look MUCH BETTER and more professional than anything an attorney can produce.

Finding investors is one of the hardest parts. If you already have them lined up, you've accomplished a lot. 

Can't believe I haven't seen this posted before, as it's huge news! 

"You want tax reform? I got your tax reform right here:"

https://www.washingtonpost.com/realestate/republic...

If true, let me be the first to sarcastically say, "Thanks for ruining our industry." 

You'd better start calling your Congressional reps and senators if you don't want this to happen...don't assume "someone else will do it." 

http://finance.yahoo.com/news/freddie-mac-names-to...

Maybe the next time someone posts "Multifamily lender wanted" they'll check this list first. These loan brokers also do non-Freddie financing. (Freddie's Small Balance Apartment loans are popular these days, but min. loan size is $1M. 10-year rate is back down to 4.5%). A broker not listed below posts current rates for apts here:

http://www.crefcoa.com/apartment-rates-main.html

Top Freddie Mac Multifamily Lenders by Volume

For an experienced owner, this seems like a really basic question. But I like Grant's Pass, so let's figure it out. The value of your "property" isn't really based on its physical characteristics, location, upgrades, etc....it's based on its cash flow stream: I don't want your building, I want its cash flow. It's a business. 

You mentioned your rents: 8 units x $575 =  of $4600/mo. x 12 = $55,200. What are your expenses and vacancy rate? Since I don't know knowing those, let me propose that today we use the 50% rule: $27,600/year. $55,200 rents - $27,600 expenses/vacancy = $27,600. To that, we need a cap rate. Oregon is a "hot" market for Californians with too much money. Selling a building in Grants Pass to them at a 7% cap rate should be a no-brainer, because these folks are quite happy to pay 5.5% for a Portland, Eugene, or Bend building. So, simply divide the Net Operating Income by .07. $27,600/.07 = $395,000. 

That's still a rough estimate. We would need your expenses and vacancy to compute the value in detail. But apartments typically have expenses in the 40-45% of rent range. In addition, we'd need to verify that a 7% cap rate is realistic for your market. You could call an appraiser or a Medford commercial broker for help. You can also check other people's listings on your commercial MLS and on Loopnet. But I still would speculate that 7-8% is the correct number for your area. The higher the cap rate, the lower the price.

Please don't directly pay for any more "coaching." 

So, what are you proposing exactly? You're not looking for funding, you're good at finding deals, but can't close them? Why is that? I always found finding the deal the hardest part. 

Do you have a lender all lined up for your deals? 

Anyone in the KC market? I grew up near there and am interested in investing. 

There are a TON of turn-key SFR providers promoting the market, but what about 10-50-unit multifamily? What parts of town are showing the most growth/least competition for MF?

I've seen Berkadia's 2017 forecast for the market; here it is:

http://www.apartmentupdate.com/index.cfm?fuseactio...

Seems really stable and growing some. Anyone have any other recent market data about vacancy rate, cap rate, rent growth, etc? M&M, CBRE, MPF, etc. would be helpful. 

I could be a passive investor or active J-V partner. If you're looking for a partner/investor, let me know.  

I agree: Start with seller financing. If that isn't available, you can talk to your lender about a seller-carry 2nd mortgage, but lenders don't really like them. You might be able to find a local lender who will do it that way, allowing you in with 15% down. But that's probably as good as you will see. Remember, local lenders hold these loans on their books for the life of the loan. So they need to make sure you have skin in the game and that they won't be burned too bad when you default and they have to sell it...

I will never understand why people don't talk with lenders FIRST instead of just asking strangers on an online forum. 

Calling every property owner makes no sense as only a small fraction would consider selling. 

What you are looking for is a "don't wanter." They don't want their property anymore, because they live out of state, because they've mismanaged it and it's a pain to keep going, because they are retiring, because her spouse died and he ran it, because they just got a negative health diagnoses, etc. For me, this means someone who lives out of state and who has owned their property at least 5 years. I think if you concentrate on a niche like that as you try to find don't wanters, you'll have better luck.

Letters every quarter, with your card on a magnet, an Xmas card during the holidays, a newsletter about local multifamily conditions, etc. needs to be part of your strategy. THEN, call them..."I sent you a few letters about your property." 

Remember everyone, Slydial let's you call a person's voicemail directly. It's an app. Costs very little. Saves lots of time.