All Forum Posts by: Bruce Petersen

I self manage our 256 unit.  

Don't know their price structure but Roscoe seems to very good; staff is always high quality and the properties look great.

Are you talking about true MF and not duplexes fourplexes and other SF?

If so then multifamily management software is completely worth it and kind of needed.  Spreadsheets are not nearly as easy or robust and sophisticated buyers and lenders really do prefer it for what that's worth to you. 

DO NOT do this without a Real Estate Attorney looking at the PSA, that's reckless on your first deal!

I have done many deals and still work with my attorney every single time to make sure I am not overlooking / missing something.

Like I have said many times on BP, if you can't afford to have a good attorney look at it then you shouldn't be doing the deal.

Taking advice from non-attorneys on this board on you first PSA is dangerous.

As @Michael Le said, there is typically not a buyers agent in these deal but if so you will almost always need to pay them yourself, it is ever rarer to have the listing broker split commission with them.

Congrats and good luck.

Yes and no.  The deal with the lender is underwritten based mostly on the business itself but the seller will want to know that you are someone to be taken seriously.  They are considering whether or not they should take their property off the market for up to 30 days so they want to make sure you are a legit buyer.

If you can't qualify for a loan of the needed size they aren't going to give you the deal.

Having said that, if you are new they may feel a whole lot better in awarding it to you but once you have established you good name you won't usually need to provide any longer.

In my market I'm done with buying on a proforma basis but as @Michael Le mentioned, your loan terms seem crazy high. I'm not seeing anything better than a 6 CAP right now for a stabilized property.

What is your COC expectation?

You can raise the money yourself, banks aren't going to lend to you for the downpayment for ANOTHER loan, doesn't make sense.  They want you to have actual skin in the game not just a shell game of multiple loans.

As @Brian Adams mentioned, your general investors won't be on the loan but you may need to bring in a signer or a key principal (KP) to help get the lender comfortable in lending money to you..In this case the KP would absolutely be on the loan with you.

I am working on a 588 and same thing; myself and investors are contributing money for the downpayment, closing costs, rehab and working capital.  I have one of those investors who agreed to be on the loan with me so they will be vetted by the lender as well.  I give a KP a piece of the equity, in addition to the equity piece for their pro rata share of the cash raise, for putting their name on the loan.

Short answer, you gotta get out there and start spreading you gospel and raising money.

No, I don't do all-cash deals and never would. That's not an all cash deal it 75% LTV, this would get me roughly 36 units which would, once stabilized, make me about 8-9k monthly.

You're probably correct, down here I can still find 70-90k/door deals, probably damn hard where you are.

@John Hickey

I'm sure were talking the same thing but you are mentioning NOI, my $8000-9000 was bottom line profit after debt service.

That 8-9k factors in your capex and I have staff run them, I never work "in" my businesses.

10% management fee is accurate here as well for SF, it's MF where the numbers start to drop.

I do understand that everyone has their thing and you don't want MF right now but when you do make the move, if done correctly, MF is way easier and more profitable.

Good luck . 

@Eric James @Michael Le

I just rate locked at 10 years, 79% LTV, 4.39% and 4 years of IO for a 200 unit.

In my part of the world I could get a 36 unit apartment complex for the 800k you have to work with.  

It would likely cashflow ~ $8000-$9000 per month. 

I would never do duplex, tri or four plex. It's a lot more work unless you hire third party and then they will dig into you profits. You are also capped on your back end profits as you will be selling these to other investors. In an apartment complex the value is driven by NOI and not comps so your upside is much higher and now you have all 36 units in one spot where you can hire a part time manager to handle it all or pay third party 4-5% to manage it for you.