All Forum Posts by: Bernard Sanga

Hi,
I am a fairly new investor, took lots of action, and now up to 7 units, mostly small multifamily. I started letting close friends/ family know about what I have been doing and have gained a lot of interest. I am also a doctor of physical therapy and have a lot in my inner circle who are potential investors.
Without doing anything actively, I was able to get a couple of investors who will fund my next deal and will allow me to pursue larger commercial multifamily deals.
Realizing the power of sharing your journey with other people, I decided to make a company website as part of building my personal brand. I started creating content and just made my first blog post. My problem is - I can't seem to share or promote my stuff even on my personal social media accounts. I think I am getting the imposter syndrome. I really can't explain why but I am really having a hard time doing this.
Have any of you encountered this same problem before? How did you overcome it?

Hey Raymond!

I am a local. If you are looking at small multis in 34203, these are typically in lower income neighborhoods (Class C). MLS deals will cash flow but appreciation has not been great in this area yet. You may see better appreciation if you go west of 14st st/ Tamiami but cash flows drops because properties are more expensive. Pick your poison. I bought 1 duplex in 34203 and it cash flows well, no missed payment through covid and no vacancies yet.

Hi Andrew! 
Congratulations on your clarity! I think its great that you know your direction and I think FL is a great area for multifamily investing! I live and personally invest in the Tampa MSA area and it has been great so far! I have mainly done small multi family deals but am also transitioning into larger multis! Goodluck on your journey and see you around!

Originally posted by @Luke Skinner:

Lakeland/Winter Haven areas! I have helped investors acquire residential to commercial properties in that area and not only are they making great cash flow they also have a strong appreciation due to all the major developments happening in that area. It is a commutable drive from Tampa up the I-4 corridor, big names have moved out there such as two new amazon hubs, public headquarters etc. I would also recommend getting with an agent that can help you look at both on and off market deals so you don't miss out on any deals! 

Not a lot of multifamily listings in that area though (not looking at small multis). Looks like not a lot of people wants to sell and for good reason. 

Originally posted by @Jed Haslam-Walker:

Hi @Bernard Sanga,

I wonder what you mean by compressed Cap Rates? It could be many different things to different people..

My experience of Multi-Family in the 8-20 market in the Tampa region is that the Caps vary significantly...the most recent detailed market cap analysis I did, by hand, and accurately, gave me a range from 6.25% - 11.85% and that was me excluding 2 deals that were so ridiculously good that it would have skewed my averages.

It really depends on your purchasing strategy - if you are looking for a turnkey operation in an expanding market like Tampa you will experience price pressure. Tampa area purchase prices are one of the 6 most elevated price points of 2020. It would be an unwise strategy to do that, unless you were a hedge fund or a REIT or you were an international group looking to park your money.

The growth in the market is a great thing, it promises continued appreciation throughout the quadrants of Real Estate Cycle and is currently still in the early to mid expansion phase -  all of this is very good but you would need to purchase strategically. I'm in the middle of 2 5+ multi-family purchases in that region with Cap Rates around 6.5%-7.8% and they are incredible deals that will end up making my clients a great deal of money.The deals are there but it requires some experience to see them I think. Many brokers do not prepare their OMs accurately, often the data reported are incorrect and an expert knowledge of the target area on the part of the investor ( or the agent) is essential in spotting a deal that's hidden in the weeds.

Additionally, manoeuvring within a mediocre deal can turn it on it's head. There are many strategies to use.

I would counsel you to pause before you move away from an incredibly lucrative growth area like Tampa to head north where your demographics, infrastructure, target market density and appreciation prospects are compromised. Remember Cap Rates are only one metric to measure a RE investment against.

Hope this helps.

Hi Jed - thanks for taking time replying to this post. When I say compressed cap rates - what I mean is property values are high and are continuing to rise thereby making cap rates go down. Price per sq ft and price per unit is quite high in the area. Does anybody have any other meaning of compressed cap rates? Just curious.

Woah, are you really seeing 11 caps in Tampa? I am seeing more high 4s, 5s and 6s at best. I think I saw some higher caps but its with porfolios of sfhs and small multis and I am not interested in that. What kinds of incorrect data from OMs do you usually see? If you are talking about incorrect pro forma information, that's a given, I do not even look at that. I mainly just look at the actual/current financials and do my own pro formas. Also, I only do deals with value adds. I like the deals where you can use RUBS to seperate utilities, and etc.

I will not stop looking at deals in the Tampa bay MSA but will be expanding my search. l look at deals every single day. Would love to connect!

Thank you!

Originally posted by @Eric Johnson:

Bernard, if you want to see increased cap rates, go to secondary markets. Instead of relying on loopnet, call those brokers and get on their coming soon list. Let them know, if they have a listing coming up, you want to see it before it goes live on loopnet. 

This can give you a slightly better chance of seeing something with a higher return. Multifamily doesn't have to be a grand slam, you can pretty much get there with base hits.

good luck

Eric, thanks for the insights. I have already done everything you said - looking at secondary markets is the main purpose of this post if you read it again. I am looking at suburbs north of Tampa and looking for some input from other investors. I also just do not rely on loopnet, I have brokers sending me pocket listings/ listings that do not even have OMs or pricing. I think calling more of them is a great idea!

Best of luck to you as well.

Hello!

I am looking to purchase my first commercial multi family property by 2nd quarter of next year. I am looking for smaller deals in the 8-20 units area. I am in the process of market analysis and seeing compressed cap rates everywhere. Feels like there's very little meat on the bone whenever I try to analyze deals that are being sent to me by brokers and those listed in sites like Crexi or loopnet. I am looking to expand a little further outside Tampa/ Pinellas county area.
My questions is: which area(s) are you seeing potential in the surrounding cities? Any leads on where to look? I am seeing better margins going north of tampa. Are you seeing this as well?
I would love to connect with local investors. Any virtual or in person meet ups or masterminds focused on multifamily investing that you can recommend?

Thanks in advance everybody!

@Ari Hadar

Because I am not always looking for homerun deals. Swinging for the fences, like what I mentioned in my

Previous post is more risk. I am not the one looking for 0 down deals if you’re following. You can direct message me if you have more questions.

@Ari Hadar

I use the MLS too. I look at it almost everyday. But you're not gonna find ‘homerun' deals in the MLS. Not in my market atleast.

Originally posted by @Ari Hadar:

Originally posted by @Bernard Sanga:

Hi Jonathan, 

I'll be honest - It is probably not a good idea. Especially since you are a newbie. This is coming from a fellow rookie, I own just 3 properties but I did extensive underwriting on possible scenarios for BRRRR and 0 down deals.

A 0 down deal means you will be 100% leveraged. So the room for error on estimating your max allowable offer and ARV is very little - actually none since every cent that you miss is negative equity on your part. It could work but like the others say - this is too much risk.

0 down deals are okay for experienced investors with a lot of reserves when **** hits the fan. The only way it may work is if you source your own deal and you find a home run where you have significant equity even before rehab - this can be your cushion.

Good luck!

What do you mean "I source my deal" and home run is 30% OFF the market value because it's a run-down house?

It means you have to do your own direct mail campaign, drive for dollars, cold calling or ring-less voicemail are some strategies/ you talk and buy directly from a distressed seller. Note: I said distressed seller not property. These are sellers who are in pre-foreclosure, in a middle of a divorce, have financial difficulties and etc. Goal is to help first, get a win-win for both parties.