All Forum Posts by: Mike Cossette

Great, I did get your email and I’m happy to add you to the list. 

We find and get sent a few buy and hold, burr and fixing flip deals every week. Happy to send you what comes across our plate as well. Email me at [email protected] will put you on our list. 

My team and I are now pulling a few hundred properties and analyzing them in Bulk every week, cherry-picking the best ones and sending them out to investors every Tuesday. We just started doing this in Mid- Nov '23 due to a lot of investor client requests. 

We are finding about 2 per 100 that cash flow before CapEX and management, and another 3 per 100 that come within $100/month negative cash flow yr 1.

We haven't seen anything close to this consistently since 2011/2012, and since we're already doing the work, finding, analyzing, and packaging up these deals I thought why not share them with everyone interested instead of just our clients? 

So Investors or potential investors...feel free to message me for more info, ask any questions, or email me at [email protected], Socials are at @askmikecoss so DM is fine too. My BP profile has all my info. 

We are happy to help investors take advantage of this unique window of opportunity in the Austin Real Estate Market. The hope is that if you find a deal you want to pursue off our list, reach out and use us to make the offer(s) and secure the contract, and we'll help with all the other details to get you through closing and all setup and running. 

Current Assumptions/Criteria;
We're using the current list price and 7% interest rate 75% LTV, other assumptions we're using are…

4% Vacancy rate, 1800yr insurance, prices between $250K and $600K, 25% down. 

We're working on adding in all the off-market fix and flip deals, and small multi-family to this same email.  If you'd rather not communicate with us but just want to be on the email you can sign up on our landing page - https://rem.ax/MikesLinks just click the Investor Opportunities button. 

Investment Info:

Large multi-family (5+ units) commercial investment investment in Canyon Lake.

Purchase price: $1,750,000
Cash invested: $350,000

This is a 12-Unit apartment complex made up of 3 Quad-plexes, bought as a "Sub To" with seller financing in Nov 2022, sold SFR for down payment.

Operations - currently self-manage with on-the-ground support tenant that receives reduced rent for their services,

+$3,600 a month in Cash flow before CapEx. ~12% cash on cash return (after the Refi) and value of the complex has risen despite expanding cap rates.

What made you interested in investing in this type of deal?

The return on equity we were looking for, the low rents for the market, seller financing, and existing note at a great rate, Ability to rehab units, with lots of value add opportunities, expanding central Texas market

How did you find this deal and how did you negotiate it?

Found this one through networking ended up being off market through my builder. Negotiated directly with the sellers, from April 2022 through Oct 2022

How did you finance this deal?

Seller financing, with sub to, Sold an existing rental for the down payment. Capitol Stack - 1st lein with the original Bank/Lender at 4% , the 2nd was Seller Financing 4% on with 3yr Balloon.

How did you add value to the deal?

Currently, rehabbing units as tenants move out and painting exterior of buildings, adding small amenities, Upgrading appliances, and Reducing expenses through more efficient operations. We have rehabbed 30% units, plan to get all renovated as tenants move-out over the course of a 5-year hold. We have repainted 1 building and increased rents maintaining 95%+ occupancy rate.

What was the outcome?

So far has been great especially considering the market shift. Average rents are up 35% in just one year, we have refinanced Oct 2023 with private money to get out of the original Sub-too Bank loan.

Lessons learned? Challenges?

The importance of starting out with a sizable CapEX budget in a down shifting market. Lending standards change rapidly when economic climate changes. When markets down cycle, security of Sub to Loans are not dependable, they can easily be called for any reason and they are checked on regularly.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My partner and I are real estate brokers. RE/MAX Gateway in SW Austin.

My team and I are pulling a few hundred properties and analyzing them in Bulk every week, cherry picking the best ones and sending them out to investors every week. At list price and 7% interest rate we are finding about 2 per 100 that cash flow before CapEX and management, and another 3 per 100 that come within $100/month negative cash flow, these are run with…

4% Vacancy, rate and 1800yr insurance, prices between $300K and $500K, 25% down. with a small Buy down on rate and/or a little negotiation on price it’s definitely possible to find right now, but not easy. We’ve are seeing more deals right now than we’ve seen since nice the last crash. Feel free to message me for more info I don’t want to get dinged for “self promotion” or advertising on the forums

I wouldn't over complicate it, I think you already have the answer. Buy a duplex, you can get great deals right now with instant equity. Refi later, self manage from the other side, you can optimize it for short term rental from Sxsw through Formula 1 through the summer, flip it over to a mid term rental through the holidays until spring break. Or hands off, long term Rent, Write off all household expenses off the income, get lots of experience with multiple strategies. Or if you prefer build out an ADU on a SingleFam. I think all this renting versus buying comparison is nonsense, you don't get Wealthy in real estate renting, you have the advantage for owner occupied rates and you can get supplemental income and get lots of tax benefits, loophole's, force equity, development opportunities, and it's unlimited teaching moments for the kiddos. If you're willing and able, you have the answer house hack with multiple dwellings, don't look back.

The Suburban markets with New construction offering decent builder buy-down rates 5s %, and selling completed inventory homes to investors is an opportunity we’re pointing investors to, as well as Duplexes outside the city, that’s where we’re finding some of the best options to get closest to positive cashflow with 20/25% down. This window of opportunity in Austin May end up being short lived, the sidelined buyer demand has been stacking up and the influx of population is never ending. Every small relief in rates triggers a rush of buyer traffic, I would take advantage of this fall and winter before the cyclical spring market rush.  

Great move on deciding to take action, you’re probably looking for a sounding board someone in the industry that can assess your position and give advice and what direction you probably already know you should go, what next steps would be and a little clarity on everything.
Great job on reaching out to connect with Agents in the market like myself. If you’d like to set up a call, I’m happy to help advise at least give you another Datapoint to work.

Yes local banks that service loans internally and keep them in house, South star, and Texas Trust bank are a couple I’ve used and had good experience with, they can customize their own underwriting to make loans based on what they need. Not what Fannie and Freddie are buying. 

Yes Tower property management, they’re great. Have several clients use and recommend them.