All Forum Posts by: Austin Sine

(annual income + annual expenses) / (cost of buying + cost of rehab) . Depending on the area if the portfolio returns a number that makes sense, then go for it. Make sure to use all real and current numbers. What differentiates a good buy and a poor buy is deeply understanding your market and costs. 

Gross rent multiplier (GRM) -- is a quick way to assess the property against others. GRM = (purchase price / gross income). You can use this against recent sales numbers.

@Alan W. I would echo what everyone else has already mentioned. The 20 unit will be a more efficient investment.

Although, if you somehow had the opportunity to effectively close on 10 centrally located duplexes there is value. Since they are centrally located you can leverage PM among the entire portfolio, reduce capex risk & vacancy risk via diversification, and completely shift your competition from experienced investors to small individual investors. 

It's likely that finding, negotiating, closing and implementing a business plan on 10 properties will be a massive challenge that isn't worth its cost in time and stress.

Good luck!

@Keaton Smith

Great choice in RE! If you’re diligent and precise you can make that $400K go a very long way. All the best!

I would recommend narrowing your focus on all aspects. It takes real time, knowledge and relationships to find the kind of returns you are describing.

- focus on an investment strategy

- focus on a metro (Midwest cashflows)

- focus on a neighborhood or 2

- reach out to brokers who are MF specific (small ones are the best)

- build a relationship

- talk with folks in town

- market to current owners

You can’t possibly do this effectively with too broad an approach.

@Steven Ha Unfortunately, Day 1 cash flow properties in that price range (especially 2000's) don't exist. I would look at some of the options in North Oak Cliff. There are some income producing properties that need work but priced in your range. 1920-1960's properties. 

@Jordan Burnett Data centers are very interesting. The operators with knowledge behind power and sustainability are winning. I believe some of these folks are signing contracts with wind farms, etc. Seems like a high barrier for entry. 

@Erik Hatch if it ain't broke, don't fix it

The real estate investing model is broad, but boundless. Ample investing resources and advice has created an environment of repetitious, vanilla investment strategies. There is a ton of value for operators that can hyper-focus on specific investment opportunities outside the "norm". Some I find interesting:

• asset roll up model
• rezoning opportunities for highest and best use

What are some niche strategies you find interesting?

@Sam Usman so much depends on the type of deal you are looking to take down and expected return metrics. There are definitely deals out there that pencil. The difficulty in most Dallas neighborhoods is competition. With that being said, your deal size will take you out of the institutional and larger private investor's playing field.

Hope this helps. Happy to answer any other questions you may have. 

As others have mentioned I would always recommend doing deals in your backyard (especially if you're a new investor). 

If that's not an option you need to match your investment style (risk aversion) with the region you want to invest in. Midwest (cheap) cities tend to cash flow w/ little appreciation, coastal cities (expensive) tend to appreciate more rapidly, etc.. Another factor to consider heavily is the markets supply constraints. Demand means a lot less when supply is growing at the same rate.

Momentum Multifamily Meetup is a great one. I believe their online at this point but great either way.