All Forum Posts by: Brian Metz

Hi @Mark Harris, we probably need some more details as to the property to make any specific recommendations, but be sure to get familiar with the cap rate and comps in that area if you're not from there. That'll play a big piece in the valuation. Best of luck!

Cheers,

Brian

Hi @Tyler D., like @Adam M Drozdowski said I'd rely on the numbers to tell me if it's a good deal. I.e. what is my return looking like? If you're just skimming and see properties listed for 1% they could work, depending on the return you want. I try to keep mine min 1.3%. It's definitely a good gauge to start with, but I'd analyze it to know for certain how it'll perform. I'd say the quicker you can ID a market you want to invest in also, will help you find brokers/agents there and build relationships, at which point they could bring deals to you. Or you can use Listsource to find possible direct mail winners.

Best of luck!

Cheers,

Brian

Every investor has different goals so this may suit you with the risks associated, but I tend to stay away from those SFRs that have been modified into a pseudo-duplex. Best of luck!

Cheers,

Brian

Hi @Danny Randazzo,

This is on a much smaller-scale than what ya'll do at Passive, but on a deal I was able to build a relationship with the seller throughout the course of negotiations. Built rapport based on similar interests, hobbies, and careers. Not sure what state your seller is in (i.e. retirement, young and acquiring, etc.), but I was able to leverage mine into feeling like he was helping me out since he was nearing retirement and I'm just starting out, and he came down to my price. Maybe on your larger-scale acquisitions you can translate that to the seller feeling like he or she is helping out your investors. A bit cliche what I'm throwing out, but it worked on a smaller scale. Best of luck!

Cheers,

Brian

@Henry Lazerow, do you have a link or some more information on WFC financing? I did a small commercial loan with them for a 6-unit and am curious what programs I might have missed when shopping!

Thanks!

Brian

And just to follow up on my comment earlier, I’d account for management for something of that size and also cross-check vacancy, unless I missed it in your pics. Your loan would likely be some balloon and probably at a rate higher than 5% and not necessarily amortized over 30 years. I’d run the numbers for different situations or what the banks tell you after having that conversation with them. Would want as much exact data plugged in as possible. Not sure where this is, but $11k a month for utilities for 18 units seems pretty steep as well.

Cheers,

Brian

Hi @Benjamin Mercier, my browser wouldn't pull up the spreadsheet, but offhand $3.4 million for 18 units seems pretty steep, hence the negative cash flow you saw (granted prices are area dependent). I'll try to pull the sheet up when I'm home later. Also since it's 18 units you'll need to work commercial financing which will require a higher down payment (typically 25-30%). Anything over four units will be valued as a commercial property.

Cheers,

Brian

Hi Bernard, after spending a few months soaking up info I found the best way to learn was to pull the trigger and do a deal. My first wasn't a home run, I'd call it a single and I'm on base now. But the learning that occurs while doing is invaluable. My only recommendation is to not hold out for that perfect deal as it sounds like you've done well with the studying - best of luck!

Cheers,

Brian

As BP says, a rough wag for expenses is 10% of gross income for maintenance, vacancy, PM, and CapEx right? A seller showed me his financials, and started with 10% of gross income, but then did 10% of that lesser net amount each time when calculating the remaining categories. So it sneakily made the expenses look lower if that makes sense...never trust seller docs!

Cheers,

Brian

 Me and words don’t always get along so well so apologies for the confusion!

Cheers,

Brian