All Forum Posts by: Andrew Pfleger

@Damien Lee

1) only use time to run deals you think might be worthy of buying. You’ve mentioned multiple times that this isn’t a deal you’d touch so you should focus on searching for opportunities that might make sense and then analyze.

2) the one question that stuck out.... how to find if it’s a 2% deal. Take the annual rent income and divide by sale price or amount of money that will be invested in property at the time you’re ready to rent.

2100*12 = $25,200/$375,000 = .067 so not even a 1% deal.

@Stephen Jones

I currently also invest in a similar area. Alton/Wood River/East Alton/Granite city. 100+ units in the last four years. In addition to multifamily I also flip homes.

If you want to scale you’ll more than likely need to add an equity partner or find someone who has the cash to help you invest. I’ve found that hard money (w/out giving any equity away) is very uncommon. Not that it doesn’t happen. I just feel like BP community kinda makes it seem as though it’s more common than it is. I could be wrong. Maybe I’ve not found the right property or the right investor.

My philosophy has always been that of wanting 50% of a watermelon vs 100% of a grape.

You can scale faster, you can share responsibility, and you can expedite where you want to be.

I started with a duplex and a tri-plex in February of 2017. Have bought and been a part of close to 200 units. Some of which we flipped and made a profit based on greater evaluation at day of sale.

More than welcome to reach out.

@Allan Smith how did you go about doing this in your business? Would love to hear and discuss.

@Tsoi Anisoquilli hard to follow this timeline... can you clean it up so it makes more sense? from what I gather it seems like the landlord made a mistake and instead of just handling it in a professional manner theyre adding fuel to the fire. Especially since they've had said tenant for 13 yrs. That tenant has probably paid for the property plus some in that time. The least they could do is claim it on their insurance... admit fault, apologize and move on. Should have hired reputable people... 

@Canesha Edwards prior to this deal we had only ever interacted with our local bank. This deal qualified for fannie/freddie lending because of the amount we were borrowing. So I learned how they process the deal etc. I also learned what they will expect after closing. Normally our local bank accepts the deal or not. Freddie may have strict requirements you'll need to have done within the first year of purchase. The interest only option for 1-2 yr period etc. In all do respects I still feel like a new investor since we've grown so quickly. I will be the first to tell you that I have plenty of things left to learn. 

Also, never expect the deal to close on the closing date... 

@Kevin Sobilo The property is in a C+ B- area and we have multiple properties performing well in general area. The units are all as solid as any of our other propertues (each with a few improvements) so I don't believe it is a unit/needing update issue. If I were completely honest with myself I'd prob say that we wouldnt place at least one of the tenants if we had to redo it. They are in the eviction process as we speak.... court date is this wednesday the 24th. 

I think the reason why I wonder about this property is because the previous owner lost it in foreclosure. I initially figured it was his mismanagement that caused him to lose the property. Now that we're in this situation I wonder if its the building itself. 

Washer dryer is provided for tenant use in the basement level, newer LVP flooring throughout each apartment... I've thought about the ductless A/C option... 

@Wesley W. We have 1 or 2 properties that are not sub-metered for all utilities and 3 that arent sub-metered for water... In one of those we add a water fee per unit. It's not uncommon for some reason in this area. Kind of a pain actually. We price them so we don't lose and to date we've done well. I will probably look into the actual cost of separating just so I know. thanks for weighing in 

@Canesha Edwards I've gone through a similar scenario. In the last year I found a 56 unit property that I wanted but did not have the capital to acquire myself. Fortunately I knew of someone who was willing to take a look at this deal with me to see if it made since for him. I wasn't sure of how we'd structure the deal but I learned a ton by going through the process. 

Since we did not have the cash needed we borrowed our buy-in from the main investor (30% of the cash to table) and we used his financial statement to make the deal work. We own 30% of a 56 unit property with 0 cash at closing. It just comes down to finding the right investor. We had a track record of building a business or 45-50 units on our own prior to the discussion on buying this property. So at the very least he knew we were serious and that we had an idea as to what we were doing. 

The other thing, however, was we ended up just being semi-involved after the closing date. I check in on the property, take care of a few things but for the most part the bigger investor already had systems in place that he wanted to utilize since it was his investment he was wanting to protect (I understand). He just wants to keep things streamlined with all of his properties. I think he has like 12-1300 units over 5 states. 

In the last 3 years my partner and I have grown a property business from 0-131 units (currently an additional 4 are under contract)

We are at a point where we need to scale on the man power side of things. If you have done this and have some time to share I'd love to discuss this with you. 

I'm at the point where I am running every which way and seem to be losing more of my time to grow the business to small menial issues that someone else could be doing. I'd just like to brainstorm with someone who has done this. Or maybe you're also in the process of doing this. 

@Pat L. I don't disagree totally with your logic based on the short story version of where we are... I do however think that before we pull that trigger that we have options. The metering issue as you agreed, is a large expense. I think the most frustrating part is that if its not broken out we have to leave utilities on when they aren't paying. So no real motivation to leave if you're getting free rent and your utilities aren't in danger of being shut off. 

I would like to at the very least try to implement a RUBS system first before we cut bait on this building. If that fails then I believe we've at least exhausted our options. 

Thanks for the reply. 

@Tab Teehee

“Should have done it sooner!”

As of April 1, 2019 I walked away from my W-2 as a funeral director. It was difficult. It was a family business and I was just tired of the long days, long nights, never ending time away from my wife and kids.

I bought (with a partner) 5 units in 2017 with no idea that we’d grow it into a potential job. I figured it was just additional retirement at the time but as we realized pretty quickly there was nice cash in the rental business. So we discussed over the next year how many units we would need for me to leave my job (40-50... we now have 131)

So after being self employed for 8 months I wish I had done it sooner.