All Forum Posts by: Andrew Campbell

What I respect about Cardone is his message is consistent. He doesn't believe in diversification and has a strategy that he believes in and consistently executes. That is my key takeaway. Find the strategy and market thesis you believe in, and then execute the hell out of it. There are plenty of folks I know how are very successful flipping SFH's, and that is all they do. Also lots of people who focus on buy and hold SFH or duplexes. Neither of these are strategies that Cardone advocates for, but they keep to their strategy and are experts at it.

While I believe much of what he does regarding Multifamily as the best path, it really comes back to staying focused on your goals are, what you are good at and then executing. 

@Tony Nguyen

I agree with all of the advice here.  Going with a 3rd party is a great way to start--its a strategy we employ.  Couple of things to add: 

1) Make sure the management company you hire has a track record in your business model.  If you are buying value add deals with a big reposition for example, you want a company that has executed that strategy before.  There is a big difference between managing a stabilized Class A asset and a Class C asset undergoing a reposition and lease-up.  Find one that is an expert in your business plan. 

2) Your chosen management company will usually interview all of the existing employees on site that are interested in staying at the property.  The advantage is you'll have some people that are familiar with the property if they pass the interview screen.  For our most recent deal, we kept 3 of the existing employees, who now work for our management company. 

Good luck!

@Brianne H.   I recently wrote an article here on BP talking about many of the questions you are asking.  If you are looking at a 4-unit vs a 5-unit, its a home run for the 4-unit.  30-yr fixed rate financing vs shorter amortization variable rate.  

As @Todd Dexheimer and others have mentioned, the bigger you look the easier it will be to get financing and the terms will start to reflect like 4-unit type terms.  Once you get into the Fannie and Freddie space you'll see the terms much more favorable to you. 

Good luck!

I'm not a lender, but based on loans we've gotten you'll need the following: 

-Net worth equal to or greater than loan amount

-Post closing liquidity equal to at least 9 months of payments

My partner and one of my guarantors are Australian.  We usually get hit with a small bump to the interest rate for a "foreigner", but other than that its not a big deal.  They are both in the US and have funds here, though. 

Good luck!

I don't think you can ever bill back 100% of it--as you have common areas, vacant units, etc. 

In our 100+ unit properties, we generally underwrite to getting ~75% of Utilities paid for by tenants.  If you can find a property not currently on RUBS it can be a major value add to your deal. 

Good luck!

What are you skills?  You want to find people with complimentary skills to yours. 

What are your goals? Do you want to operate in your local area and be "boots on the ground" and leverage your knowledge, or do you want to focus out of state where you might find better opportunities. 

I posted an article recently about the various team members you need to assemble.  Which role do you want to focus on and where do you need to get teammates? 

You absolutely need an attorney.  Outside of that, how you put together your team is up to you. 

Good luck!

@Mateusz Prawdzik I would say it really depends on your business model, and what condition are they in now?  Are you planning to own this forever?  Then it might make sense to come in and address the mechanicals to future proof some repairs.  If you are a shorter horizon of 5 years or so, I would focus more on the cosmetic stuff.  You won't see as much return in the form of higher rents because you updated wiring and mechanicals as you would from cosmetic upgrades like flooring and kitchens. 

Would also depend on the age of the property. 

$25k is pretty steep for a full gut.  On our cosmetic upgrades, we spend about $5000-$7000/unit--and I would bet the premiums are very similar vs if you did a full gut rehab. 

Good luck!

I have found the local business journal will usually have a list of the top property managers (based on volume).  I usually buy that report as use it as a starting point, then start to do research on the companies and start calling/interviewing them as @James Kojo suggests. 

Good luck!

@Mateusz Prawdzik  You can use out of state folks to help you run numbers, but they are not going to be familiar with the area like you are.  So if you are telling a story about the how the neighborhood is in the path of progress, you'll need facts and sources to back that up.  On the lending side, for a property that size its easier to stay local.  They will want to walk the property and check on it--especially if you have a construction component to the project. 

If they are on the tax record together, I would think you can get a single loan.  We're working on a deal with 16-buildings, but its all one property and one loan. 

Good luck!

It would depend on the sponsor and the deal.  What is their track record? What is their business plan?  What is the location?  Etc etc. 

And what are they wanting from me?  Just to leverage my credibility and track record?  Bring equity? Look over their shoulder?  

One of my favorite things about this business is that every deal is a snowflake and you can get creative in how you structure the ownership of the deals.  It would be tough to say until some of the above questions got answered.