All Forum Posts by: Alexander Felice

my first strategy was to get 10 single family houses in 10 years

then I found out that was way too easy from a transaction standpoint, and I realized that going over 10 houses started to decrease the efficiency of money versus the effort I had to put in the transaction 

so I bought a 24 unit C class, realized that it was WAY too small, the debt efficiency was too low, and tenant quality created problems I didn't want 

so I bought a 52 unit B class, and that was much better but going forward I'm looking for much bigger properties and higher quality tenant base. ~200 units A class would be ideal - highly efficient use of capital and debt, inherently low risk, and higher likelihood of appreciation. 

Problem is that new construction cost per sqft is more expensive than existing. So while you might be able to get more money for an ADU, it's going to be an inefficient use of capital versus relative other investments.

as much as I hate to be seen agreeing with @Dan DiFilippo he is right in this instance. 

If you have an underperforming asset, either consider it a sunk cost and salvage what you have (assuming you don't have the equity to sell), then use your resources to make better decisions going forward. 

If you want to rid yourself of the asset, sell it and start clean. 

do not throw more money at an underperforming asset to try and fix it when it's in a retail condition. This is the definition of the age old saying "Throwing good money after bad". 

As always Marc, I'm around to talk things through if you want ;) 

First ~4 houses were slow for me, then you get enough talent and momentum to go a bit faster. 

However, buying 2 sfh a month seems like an awful goal for me. If you want to scale real estate, go multifamily, owning 20+ single family doors is low efficacy of your time. 

I was able to go fast because I created equity, I didn't buy it. instead of putting 25% down on your deals, if you could create 25% equity and keep your cash you'll be in a much better position for speed and you'll have better deals. 

If you get an FHA loan, you can put 3.5% down but you'll have to live in the property for one year, also it'll be a retail house so not much availability to value add.

for a fix and flip, I recommend finding hard or private money to pay for the asset, and put it in an LLC.

For a buy and hold an LLC is usually a waste of time

Hello friends, my name is Alex. I am a real estate investor, long time BP contributor, and I make the BiggerPockets YouTube show "Meet the Investor".

I am traveling to Indianapolis in mid-February to produce 10 episodes of this show in your community and I'm looking for motivated guests to share their story, and I'm also looking for some people to help film and edit the series.  

We have completed 2 seasons of this show already (Fayetteville NC, and Washington DC) and it has been very well received, BiggerPockets looks to make this a regular production for their brand. 

You can see some recent episodes here:

For those who are interested in participating as a guest, please fill out this google form here: 

https://docs.google.com/forms/...

For those who are interested in participating in the production side (filming/editing), please fill out this form:

https://forms.gle/6hmJXWwh1Y52...

I look forward to your responses and I'm around to discuss any additional questions you may have. Thanks! 

@Sunitha Rao 

@Alain Perez-Majul

Spoat Jackson and Browne

They manage ~80 properties for me and take care of the rehabs, the owner is an investor himself

Also, there is a very welcoming meetup in town on one Sunday morning each monthly called Real Estate Church.

Welcome! 

Investment Info:

Large multi-family (5+ units) commercial investment investment in Fayetteville.

Purchase price: $3,200,000
Cash invested: $50,000

Contributors:
Rodrick Jackson

We found this off-market property while networking with other multifamily investors and loved it from the start. We worked it for MONTHS and had a pretty clean closing. We got Freddie Mac debt at 3.55% 10yr balloon, and 30yr amortization.

This is a reliable property in a market that I know very well, rents are currently below market and expense ratio is too high, so I expect to pay my investors their returns consistently.

What made you interested in investing in this type of deal?

Large multifamily apartments are a more efficient use of capital than single family. The bigger I go, the better the use of money gets. I started with single family homes (long distance BRRR) and now I'm happy to be doing these size of assets.

How did you find this deal and how did you negotiate it?

I was networking with BP legend Matt Faircloth at a property he was closing and a broker there had this off-market pocket deal that perfectly fit my buying criteria.

How did you finance this deal?

Syndication

2.25MM Freddie Mac debt
the rest was raised from equity partners

How did you add value to the deal?

The property is in good shape just mis-managed. We will increase rents and reduce expenses.

 yep, I think the next one is on the 13th 

Real Estate Church happens one Sunday morning a month, you can find it on FB. Usually ~25 people show up. 

I own 32 doors in Fayetteville and 2020 has been one of my best years

However, I haven't bought a single family home in just under 2 years here.

Outside investment is driving prices up but only on the wholesale side, the retail side is not inflating nearly as fast. This means profit margins are shrinking. There are people paying 80k for a house worth 90k that rents for a 900/month rental and will never appreciate, and some pay more than that, which is fine for an outside investor who need a low risk place to store resources, but it doesn't make for a very profitable asset.

So yes Fayetteville is highly resilient, but if you're willing to pay up for a property to the point it's barely breaking even, then it really only makes sense if you just need a place to store cash.