All Forum Posts by: Ben Feder

Just curious if you're able to explain what all of those terms mean and their corresponding statistics that I don't understand. Product type, term, YOC, etc. all the way down to waterfall. What does each term and statistic mean in your post? Lol sorry I am new to this I don't know all the terms yet.

Assume a project cost in the 10-50mm range in gateway / primary markets

90/10 deal

I currently use the following UW Assumptions:

cap rate expansion: 5-10 bps per year

rent growth: 2-2.5% annual

Product type: mid rise affordable MF spec development

Term: 3 yrs hold

YOC: 6-7%

Trended ROC/spread: 150 bps > exit cap

LIRR: 16-17%

EM: 2x

LTC: 65%

LPs pref: 9%

Waterfall: 80/20 to 13%

70/30 to 18%

65/35 thereafter

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Originally posted by @Ellen Kirchdoerfer:

@Ben Feder I suggest getting familiar with pricing in your area. Zestimates are very inconsistent in my area, some high and some low. If you are using a buyers agent, they may be able to find some comps to support pricing on a specific property.

Finding comps seems like a very important factor to consider to approximate the correct value. I know looking at recently sold homes is a good way to go, but how do you actually do this process of analyzing recently sold properties--they are not the same square footage and they have different features/room numbers, etc. Do you figure out based on a per square foot basis and calculate from there, count number of bedrooms/bathrooms, etc.? What is the right way to go about this?

0 Votes

Originally posted by @Brandon Wolf:

@Ben Feder thanks for reaching out! Philly is a great city and a close neighbor to Baltimore.

I bought my first SFR back in the end of May and it took a little over a year for me to find and I believe I still rushed it! Of course I put in more offers then I can count but always got beat out. At the time I was traveling 100% and was looking for something to invest my money in while I worked on the road. I figured property would be a good investment.

My goal was to use the brrrr method but due to my travels I was finding this nearly impossible as I wanted to do some of the rehab myself, also managing contractors while on the road is not ideal in any case let alone during a first investment.

I ended up going with a town home that needed very little work but one that could still give me the cash flow I needed and one that I could see myself moving into just in case thing went awry lol. I’m generally a cautious person, but going through this process has giving me confidence and 5 months later I’m ready to buy a second property.

I manage the property myself which I realized could be very hectic once I had hundreds of emails/phone calls come in to view my house but it gave me the ability to choose great tenants who I have had no problems with. I purchased the house for $214,000 with 10K down at a 4.5% interest rate. My cash flow is $475/month which is not bad considering this was not brrrr.

I am excited for my next property as I know I will have a much better cash on cash return along with a stronger cash flow using the brrrr method.

I look forward to having more experiences to share. I'm glad your first investment worked out. And no $475/month isn't bad especially for a first time investment/lower cost property. Do you know if you will go with any management companies in the future if you invest in apartments or multifamily? I will be looking to have a good management company when I make my first apartment complex purchase.

1 Vote

Originally posted by @Morgan Madill:

@Ben Feder

I'm extremely fortunate to be taking home the money from the 9-5 that I am. I've looked into the BRRRR method, I should probably give the long distance BRRRR book a read! That'd be awesome man would love to talk strategy

Certainly! Where do you invest now? Locally? I'm considering local to start off so I can physically be at the property but being able to do long distance certainly expands the horizon for more opportunities. Would love to connect.

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@Brandon Wolf welcome to BP! I'm pretty new here too and to investing. I am looking to go into multi-family and apartment buildings as well in the Philly area but have cousins down near Baltimore so I go down there sometimes.

What is your story with the first SFR you did?

2 Votes

I know when it comes to SF and small MF you can look for motivated sellers through list sites, but how can you find a good deal when it comes to apartment buildings? Are there motivated sellers when it comes to apartment buildings (5+ units, possibly around 30-50 units, maybe more)? Are there foreclosure bargains to be had? What criteria are there for buying apartment buildings? Any input is appreciated as always.

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Thank you all for your input! I guess then besides the on-the-ground inspection and comparison, looking for comps sold will be good if I calculate on a per square-foot basis?

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Does Zillow (or other listing sites for that matter) have fairly accurate estimates or should you only rely on getting appraisal or inspecting and comparing to comps?

1 Vote

@Riley Schaefer where can I find the info though besides the list companies? Where in public records do I look?

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All Forum Posts by: Ben Feder

Ben Feder has started 51 posts and replied 170 times.

Post: current LPs / GPs development & value add returns

Post: Should I trust Zillow's Zestimate?

Post: Looking for investors in Maryland. Multi-Family/Apartments

Post: RE Strategy for working on the road and long hours

Post: Looking for investors in Maryland. Multi-Family/Apartments

Post: How do you find good apartment building deals?

Post: Should I trust Zillow's Zestimate?

Post: Should I trust Zillow's Zestimate?

Post: Should I trust Zillow's Zestimate?

Post: How do you find the motivated sellers to market to?