All Forum Posts by: Ciro Affronti

@Brady Boyer I have a few tips that I've found to help. I still struggle with this but I've been able to cut down from 50% no shows to about 25%.

1. Have an initial screening and send the screening criteria over to the potentially interested party. This way they know right off the bat if they don't qualify so hopefully they don't waste your time. 

2. Confirm any showings 24 hours in advance, and then text or call to confirm 30 minutes before the appointment (or before you drive over there) that they are on their way and will be there. Typically if they don't answer they don't plan to show up so that can at least save you from driving to the property. 

3. Try to schedule your appointments all in one block of time so if you get a no show hopefully there are more showings lined up that can salvage a trip out to your property. I typically try to line up 3-5 showings all in one block of time. So each showing gets scheduled for 30 minutes, with 15-minute breaks in between showings so there isn't that awkward overlap where your next appointment shows up before you finish. 

I don't think wishing for a recession is the right way to look at this. A recession means our economy is retracting, which likely would result in job losses, rises in unemployment, and a lot of other negative impacts on everyday Americans. 

What I do wish for is for cap rates to rise and for the real estate investment market to become more affordable. I think we are all just looking for more opportunities to find deals that make financial sense and be able to grow our portfolios!

I’m currently using house hacking as a way to build up a portfolio of small multi family properties as well. It’s been a great way to learn and acquire properties. You are able to move out after a year, and turn it into a traditional rental and then do it all over again and keep the party going! Offsetting your living expenses from your other unit is also a great perk, as you can use the lower housing costs to save more $, and then put up down payments faster.

Those taxes are insane though! Good old New York. Here in AZ taxes on my duplex are only about $100/month. 

Best of luck!

Camelback East and the surrounding area in Phoenix is my favorite. It's a bit expensive right now but a lot of growth happening as areas like Arcadia and the Biltmore which neighbor it become less and less affordable. Camelback East was just named the #1 neighborhood in Phx for millennials and young professionals in 2019 as well in the Phx Business Journal.

Good luck!

Tough and expensive education. You probably have slim odds of getting that contractor back to your job to finish work you might want to consider cutting ties and getting a new contractor in there to keep your job moving. 

Working on clearly defined draw schedules will help avoid this in the future. I worked for a GC and we would usually work on a 1/3 schedule. So 1/3 paid upon completion of a defined amount of the scope of work, 1/3 when 50% complete, and then 1/3 when completed. I would also recommend to hold back the final 5-10% until the final punch list of work is completed. If you pay in full when the contractor says he is done, but then find more issues after inspecting it will be tougher to get them to come back without financial incentive. 

Good luck hope it works out!

@Cirilo Villar Congrats on starting the journey! Getting advice and learning from those who are already successful investors is a great first step. I bought my first duplex at 24 so I definitely know what it's like to want to start investing and buying properties right away. 

There is a lot of great advice in this post already, but I'll throw my two cents in from my own experiences that helped set me up for success:

-First would be to get your financial house in order and prepare yourself for the journey ahead. Turns out real estate is expensivse! I constantly read financial books and learned proper financial habits. I learned to live off 40% of my income and save the rest, taking advantage of the fact that I was young, single, and flexible. I would recommend saving more money before buying your first property probably closer to 20-30k.

-Get a job or find a way to make a solid income while you are learning and preparing. Build a solid foundation to grow off of while you are so young. Spend that time building up savings to learn about real estate investing, network, and soak up as much knowledge as you can. There are tons of posts and resources on BP for newbies. 

-Look into house hacking as your first real estate investment. That's what I did and I highly recommend it. Not only does house hacking let you get into an investment property with FHA financing (low down payments), it also helps reduce your housing expenses allowing you to save and invest at a faster rate. I bought a duplex with an FHA loan and put 3.5% down, rented out one unit, and got a roommate to maximize income. I actually cash flowed a little bit each month so I had 0 housing expenses. The equity you can build doing that combined with the extra savings potential can be a powerful vehicle for growth.

-Stay positive and keep grinding! Good luck.

Camelback East area is where the majority of my properties are. It's a great value add area because it's right on the fringes of the premium areas of Arcadia and the Biltmore area but it's cheaper. Definitely on the rise and extremely easy to rent units and find good tenants. There is also a lot of gentrification going on on Indian School Road and Thomas Rd and a ton of jobs and bars, restaurants, entertainment, etc.

Good luck!

That price per unit is very low for a remodeled fourplex in Phoenix. That would give me some hesitation. In this market if a deal is too good to be true, it usually is. Sunnyslope area can rough and has a lot of bad pockets. The price is probably that low due to the neighborhood. Some people who invest there do well, but we always have stayed away.

The rents and expenses seem to be reasonable, but again it would really make me wonder about that price when Phoenix multi family is over 100k per unit these days for units that aren't fixed up. 

My advice is find what's wrong with the property and if you can live with that/ are willing to put up with it then go for it. 

Thanks for these awesome responses, I have a good amount of information to ask when we sit down with the buyer's rep.

I'm glad to hear I'm not the only one to hear that a 5-6 cap seems way too high of a valuation for this property. Yes the park is very congested and the units are run down, it's out of place for the neighborhood. 

We were thinking more in line with you guys in paying more of an 8-10 CAP for the properties. We see it as a long-term play that yes one day we can possibly knock it all down and build new, but the purchase price would be wayyyy too high for just a land play. In the meantime, we would need to own and operate the asset, and I don't see why we would pay the same price for an MHP as we would for an established multi-family apartment complex. It doesn't seem like an apples to apples comparison to me like this seller is trying to make it out to be.

We will probably look at negotiation the price down to 1.2-1.3 million.