All Forum Posts by: Andrew Freed

@Carlton B. - I'd agree with some of the sentiment, the item that kills most deals is the inspection. After that, appraisal is a close second. Appraisals do have a 2 week lead time so you can always order it before the inspection period is complete, but it might just be a waste of money if you aren't moving forward. Unfortunately in real estate, there are certain checkpoints that need to be overcame before you can move forward  onto the next checkpoint. If you try to hurdle over the checkpoints without determining if you want to move forward or not, you could waste precious and unneeded resources during the due diligence process. 

@Mary Eubanks - I mean if you can toss it on the MLS, put less work in and make more money, its a no brainer. It will be short term capital gains though hence I hope you have some strategies to mitigate the tax burden such as being a real estate professional according to the tax code, utilizing cost segregation studies, or possibly utilizing the short term rental looppole.

@Jennifer Anderson - In my humble opinion, the best network is local hence if that is your goal, I highly recommend you attend as many local meetups as possible. Building a network takes time and consistency. For me personally, I did not really start building my network until I attended meetups consistently for a year. 

Additionally, consider starting a real estate meetup. That is a super easy way to build a network since you are creating your own investing community locally. That has helped me tremendously. 

Lastly, if you ever have any multifamily questions, always feel free to reach out. Good luck on your journey! 

@Dan Weber - I host two every month. One in New Bedford and one in Worcester. It's completely free and a great place to network with other investors. It's simplified REI Worcester and New Bedford. Stop on by if you're in the area.

@Tom Server - Look up the Binder Strategy by Dion Talk Financial Freedom on youtube. This is the strategy I use to negotiate higher rents with inherited tenants. If I can use this strategy to negotiate rents $100-200 below market, a lot of times this makes sense from an ROI perspective. If it saves me $10-15K per unit in cosmetic upgrades to negotiate the rent a couple hundred below market, I'll do that all day. I'd rather use that $10-15K per unit to buy more properties. Currently 70% of my tenants are inherited and the binder strategy has been extremely effective in securing the rents needed to create a cash flow property.

@Matt Taylor - Based on the purchase price, seller carry, down payment and current income, It seems like a solid opportunity. Also there is ability to increase rents by 30%. Given that the proforma rent is more than 2x the PITI and the in place rents still make the building cash flow, I'd say its a good deal. This is assuming there is not a ton of deferred maintanence on the building so definitely have a formal inspection and contractors walk it.

Also, make sure to review the commercial leases to ensure you have the ability to increase rents easily. Some commercial leases have weird stipulations. 

My advice would be to move forward, conduct due diligence, and either buy it if the assumptions are verified or walk away. Just the cost of doing business in real estate. 

@Rachana Prabhakar- 10/18 same time same place. It's always on the third Wednesday of the month. 

Cash on Cash return. That is my biggest measure of success. What is the yield on the money that I put into a deal? That is how Warren Buffet evaluates businesses. It's future expected cash outlays over a period of time, e.g. Net Present Value (NPV). If the best investor in the world measures an investment based on how much cash it splits out over a period of time, who am I to question if it works or not? 

@Account Closed - Yes, insurance is expected to rise 20-40% this year as a result of the increase in claims that they have been paying out the past few years. This is due to the extremely weather conditions across the US. It rised on one of my multifamilies from 4500 to 5700. One thing you can do is request that your deductible is increased. If you don't plan on filing a claim unless its at least 5k, why pay a premium for a smaller deductible? I did that and it saved me hundreds annually on a few different policies. 

@Anthony Freeman - Yes, I got a $50K unsecured LOC from a small local bank for one of my LLCs. It's a rare product for sure, but they are out there. Mine was a simple one page application where they asked for the LLCs revenue etc and did not verify much. Usually, they offer LOC for like 20-25% of the company's revenue. The bank I used was a small bank in CT called Liberty-Bank. I hope this helps!