All Forum Posts by: Arun Iyengar

I am a multi-family investor and purchase apartment complexes.

I've started to notice that more deals are coming in unpriced (or with a statement "price to be determined by market"). A short conversation with the broker yields the "whisper number" which is what the broker and seller hope to sell the property for. This is irritating. Why not just put the price on the offering so that I know what is being asked, have the ability to do all the underwriting for expenses and can come up with my fair pricing to buy?

I wonder if this is a gimmick used by inexperienced brokers or whether this is more widespread and I just started noticing it. Any feedback from the broker or investor community is appreciated.

 Thanks @Brian Foster. Excellent resources, appreciate the links. I agree with your analysis. However I decided to back out of the deal since the seller's expectations were higher than I was comfortable on average unit price. I will continue to invest locally while keeping watch on good cash generating and growing properties out of California.

Thanks  @Lynn Dee Murrow. I ended up passing on the deal exactly for the reasons you mentioned. I am looking close to San Jose as well, thought Houston could have potential. Live and learn!

@Gaurav Raj,

You probably already know this. The only 2 options are you can use your own money and lacking that, you can use outside money. For your own money, the options are savings, home equity loan or a cash out refinance on your existing home, or a loan against your investments. For outside money, you could partner with other like minded investors to buy the property, or as a lot of BP members talk about, join a syndicate. I have thought a lot about creating a syndicate, but have not done so.

Good luck 

I am an investor based in California.

After Hurricane Harvey, I figured that investing in Houston apartments that weathered the storm with no water damage would provide value. Particularly as the housing stock had supposedly come down quite a bit, and with rebuilding needed, there was going to be a strong demand to take up any vacancy in any of the existing apartments.

With this thought, I put a bid to purchase a larger apartment complex in Houston. To no great surprise, there were others thinking the same way and the property had over 8 bids. The seller went through 2 rounds, and my bid was chosen to get to the 2nd round. In the interim, I contacted some local realtors to get the lay of the land and one of them gave me a lot of information that questioned my thesis to invest in Houston. He said that only a small fraction of apartments were damaged and these were far below the total number of vacant units.

So the question to the community would be whether my going in premise was flawed or is the realtor feedback flawed? I did decide not to increase my offer in the 2nd round and just found out that the seller had decided to go with someone else. Did I miss out on an opportunity?

Does such a thing exist and if so where? It seems like an Unicorn, with many supposed sightings but no real pictures :-)

I am looking for a larger scale multi family property to buy in a non rent controlled area of the US. Also, I am looking for this cap rate based on current rents, not pro-forma rents.

So, does such an Unicorn exist? If anyone has ideas, please provide specific locations or even properties which satisfy the cap rate criteria.

Thanks

You could do what everybody in the Bay Area typically do to get started in the rental market. Buy another house to live in and rent out your existing place. You will likely have bought it at least a few years ago and will have appreciation built in, with the commensurate lower property tax. 

The alternative if you want to go it alone and not with a group of people or an existing syndicate is to wait until you get sufficient capital accumulated to purchase a larger multi family property. 

I've been an investor in the San Jose area in multi families since 2014, and adopted the philosophy of purchasing properties that were no more than a 30 minute drive from my house. Having been a multi family owner for 3 years, I now feel like I have sufficient experience to venture out a bit further, although I still am looking within California.

Hope that helps.

I am thinking about just living on my rental income and not be employed by a company. However there is the question of health insurance. Since I don't qualify for Medicare, the alternative would be to obtain Health Insurance through the ACA. I hear many horror stories of how poor this insurance is. My question is to those that are now living off their rental income and not yet eligible for Medicare - How have you gone about choosing Health Insurance for you and your family?

Thanks Boris. I just did check that out and you seem to meet once a month, with the next one in end June - correct?

 Minh,

Thanks for your reply. I have been an investor in San Jose for a few years with multi family buildings. The recent passage of rent control in San Jose has put a damper on my ability to acquire properties and get them from below market to market rents.