All Forum Posts by: Brian Alfaro

Andrea - before COVID there were so many meetups you could literally go to one Mon-Sat every week. Most of them have gone virtual now. What asset class are you focusing on? Single Family Homes?

@Matt Schreiber When you say Multifamily, what size asset are you talking about? Some people are strictly talking 2-4 or 4-10 units. Or are you looking at 100+? Changes the response...

@Justin GoodinCould you be a bit more specific? What exactly are you underwriting? Multifamily? 

There are a ton of great underwriters, some of whom which will gladly give you their time to help if they can, and some that you can pay to review your underwriting. There are also underwriting courses you can take all over the internet. 

Thanks to everyone for replying. Very helpful! 

Hello!

Does anyone have any experience with HUD and LURA (Land Use Restriction Agreements) for Multifamily? We are looking at a 100+ unit that the seller is currently restricted to with HUD/LURA regulations. It is causing the property to have very low occupancy, so there is a lot of meat on the bone if we could remove the restrictions. The property is fully renovated in an up-and-coming area, and the current on-site manager has stated they reject a hefty amount of applicants due to the restrictions.

From my understanding, the LURA restricting the income of potential residents cannot be removed even when sold until year 15 of the 30 year contract. Does anyone have any experience with these types of properties and potentially removing the LURA or formulating a business plan to make this project successful with the restrictions in place? I think this would be a tough sell to passive investors; selling this property in 5-10 years with the restrictions still in place limits the amount of interested buyers. 

Any info or advice would be much appreciated! 

My apologies - here is the link to sign up:

https://www.eventbrite.com/e/n...

I agree with @Taylor L. Track record is something you definitely want to look into. The numbers being advertised are used as click-bait - focus on the property and the sponsors running it. You have to dig into the pro-forma and ask the lead sponsor questions to get a feel for their business plan. Right now some big questions would be:

-  Do those numbers include projected rent growth? If so, what year does the rent growth begin?

- Do those numbers include 6-12 months of PITI or OpEx reserves? A lot of lenders are requiring this right now due to COVID.

- Ask about the capital stack and the split. Is it 80/20, 70/30? Is there a preferred return so investors get paid first? 

- What type of fees are the sponsors taking? 

- How has the property performed during COVID? How was it performing prior to COVID? 

The list of things to look for is long, but those are some good ones to start. 

Best piece of advice I can give you @Cheyenne Gamangasso is don't wait! I wish I jumped into REI right out of HS or College. You have a big competitive advantage over everyone - TIME. Don't waste it!

Welcome to BP! You're in a great place! Lots of great people and resources on here. Seems like you're already on the right track, so keep it up!

Join us online on September 24th @ 7:00 PM CST to learn how to navigate through various market cycles and climates from Mark Hentemann! Networking will occur prior to Mark's presentation, so be sure to get there on time! 

Mark Hentemann has been investing in multifamily since 2000, building a personal portfolio of 14 Los Angeles apartment buildings. After honing his skills for a decade, achieving success in both good markets and bad, Mark started Quantum Capital RE, and is its principal.

He has completed 50+ value-add multifamily investments, remaining passionate about it as a superior investment. His mission is to share his knowledge and help friends and like-minded investors achieve their goals. He’s also an Emmy Award nominated writer/producer who has written for David Letterman, Family Guy, and created shows for Fox and MTV. He lives in Los Angeles with this wife, Lynne, and their three daughters.