All Forum Posts by: Andrew Caldieraro

@Joel Owens I was referring to a STNL. However, I’m looking at properties slightly below the 1-million mark. I realize this greatly limits the tenant. I was more or less trying to compare the tax benefits. That might swing my decision on which direction I want to go (STNL vs MF).

Hello, I’m curious how the tax advantages compare when investing in small MF (2-4 units) to a NNN commercial property? With the MF units, I realize you can depreciate the units. However, with a NNN property where the tenant is responsible for everything (taxes, insurance, building maintenance, parking lot, etc.), are there any tax benefits? In addition, how advantageous is it to invest in an income tax free state?

@Janett Lewis how much work did you have to put into those houses? And how many beds/baths are they? Are they in nicer areas in St. Louis?

@George Skidis I’m currently in Collinsville, IL. Not far from you.

Originally posted by @Jeff Kehl:

@Andrew Caldieraro rather than giving you any specific suggestions on the list you posted let me just say that you have a very good idea on what is needed and the specific order or if you're missing a step (check zoning?) is not so important. I'd say you're one of those 'analysis paralysis' people and you should just start making some offers.

Most investors find out a lot of those steps along the way.

You asked if you need an agent. My answer would be yes absolutely if you can find a great agent they are worth their wait in gold. If you can't, just proceed without them until you find a great one.

In short, I think you have 'analysis paralysis' and think you should just start.

Actually... now that I said that I do have to criticize your list a bit.

First, as someone said earlier, establish what your goals are.

Second, pick a market. Are you absolutely set on investing in Illinois? I've lived and invested there before and am not a fan.

But, if that's where you're at, I think you can probably do pretty well there. Just get started!

 Thanks for the reply. I am in Illinois, so that may be the easiest place for me to learn the game. Then again, I live 30 minutes from St. Louis, so that may be a smarter decision. Regarding goals, that’s where I struggle. Many of the MF apartments  in my area rent out for 400-450/month. The overall cost is less, but IL taxes are more. A 4-plex in St. Louis might cost the same as a 10-12 MF apartment complex in a rural IL town, and the monthly rent isn’t quite as much. But there were be fewer units and tenants to manage. I’m torn...

Originally posted by @David Cruice:

That's a lot of questions for a single post, @Andrew Caldieraro, but here goes with at least a couple of answers/suggestions.  

You're missing setting up your financing.  Get pre-qualified so you know how much you can borrow.

What is your definition of "a small MF complex"? How many units. If 4 or less get yourself and FHA low with 3.75% down.

Depending on what state you're in you might not necessarily need G (an attorney)

H depends on if you intend to "house-hack", i.e. live in one of the units yourself.  Personally, I believe the best way to lean how to manage real estate is to do it yourself (warts and all)

Why are you brining in an agent at the end of the process?  You should be doing this at the beginning (if you want to go that route.

Thanks for the reply.  As you can tell, I'm new to this process.  I don't have an exact property picked out yet.  Some that I am looking at are duplexes.  Others have 12-units.  Either way, I'll be good on the financing as I have already spoken to the bank.  I am in Illinois.  I wasn't sure if an attorney was needed to evaluate any of the seller's paperwork, lease agreements, etc. or I needed one initially.  I thought that it might be a good idea, but maybe I'm wrong.  I do not plan to live in one of the units at this time.  Also, I didn't know about the agent.  I figured they would be good to use to sift through all of the paperwork, title work, etc.  But, once again, I have no experience with this process.  

Hello,

I'm hoping I can get an idea what steps I need to take, in which order, for possibly purchasing a small MF complex.  Below is a list of things that I need to do, but I'm not sure what order I go about these.  Does this step-by-step look about right?

A.  Find a complex I'm interested in and run quick numbers / a little research to see if it likely could make sense.

B. Submit an offer, pending inspection and due diligence (Do I need to have a realtor submit my offer?).

C.  Due diligence (how much time should I request when I receive due diligence info from previous owner?).

D.  Have an inspector evaluate the property.

E.  Have any other professionals (contractor, roofer, etc.) evaluate the property based on inspectors findings.

F.  Re-negotiate offer, if needed, based on findings of inspector and/or other professional.  

G. Find an attorney.

H. Find a PM.

I. Find a realtor (is this needed if I find the property on my own?).

First, are there any additional steps that I missed?  Secondly, how does this step-by-step process look?  I'm wondering if I need to find a PM much earlier in this process?

I'd appreciate any help/suggestions!

If anyone from MO, or even IL, want to get together sometime, I’d love to join. Are there any specific RE investing groups in this area? I’m mainly interested in small-mid sized multi family complexes, if that matters.

Aside from checking rent roll, having the property inspected, look at all given expenses from the current owner, and look at the census from the town/city....What else do YOU look for when buying housing complexes, especially if you’re buying out of your state? What steps do you take?

I keep reading, “have it inspected well.” Is this from a traditional inspector? Do you always pay for that service prior to making an offer?