All Forum Posts by: Calvin Lipscomb

@Calvin Lipscomb if your in Brooklyn come up and check out Newburgh NY. I was an investor in bed stuy in the mid 2000s. Interesting stuff going on up there if you don’t mind taking risks.

Since your talking about gentrification and D property I figure your ok with risks but just to emphasize that’s risky stuff. I love it tho.

Thanks for thought. What are some of the drivers up there that you are seeing?

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@Tedros Fremichael It can be that bad. Ha.

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Originally posted by @Uneeq Khan:

Originally posted by @Calvin Lipscomb:

This is what I'm having trouble with, building the holding cost into the HML loan. Holding cost (which consist of monthly payment of HML loan) is dependent on total loan amount, but you can't know total loan amount if you dont know monthly payments. It seems like an infinite loop. Am I missing something?

Yes. I Recommend that you look through few postings, YouTube, a few books, and start attending some real estate meet ups to learn more. You can use a mortgage calculator to figure that out. $100k @ 12% comes out to $1029 per month. You expect to hold that mortgage for 6 months (6×1029) = $6174 in payments to add in to your overall expenses.

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Originally posted by @John Hickey:

@Rashad Jones Jennings be very careful with property managers in D areas. Or sure they know what they’re doing and have a few backup PMs in place. It’s a nightmare to buy property in a D area and get stuck having no choice in PM. Me? ive done it both ways ans next time I would start small and self manage.

@Calvin Lipscomb if your looking for info on how to invest in gentrifying areas look up Brian Murray’s book crushing it in commercial real estate.

I never found a lot of info on how to invest in gentrification. It’s not easy to do but it’s easy to get burned bad.

However when you do it right you can make money. Most investors look for 10,12.15 percent. With gentrification I’ve made 40x my money.

When you see favorable demographic and economic changes you that there will physical expansions. You need to he aware of the driver's of that expansion and what makes a particular area favorable. Knowing your local market is a key advantage. You are 100% correct in that you need a solid PM firm to assist with such a plan.

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Originally posted by @Ceasar Rosas:

@Jake Fugman

Just sent you an email. If we can do 8% cap with a potential to add value that would be ideal.

@Calvin Lipscomb

That's great stuff Calvin. The reason I started looking at Chicago is because it kept popping up in the top 20 places to invest in multi-families. It's not top 5, but seems to produce decent returns where you can still purchase above an 8 cap. As you know here in our boroughs, you're lucky to get a 6 cap if even possible anymore. You can't even touch a 6 unit under a million. Don't get me wrong I love New York City investing, but right now it's appreciation play in the 5 boroughs.

Ha! The same reason why I started in Chicago as well. In addition, I have a bias toward 6+ multifamily units. This was our first venture and we have not even completed a year, as mentioned. We struggled with obtaining permanent financing (first time investors and out of towners). We are currently using HML money to renovate and re-position our properties over the next 7-8 months. By then we expect to be established enough to obtain optimum financing from a local bank for our buy and hold strategy. I recommend that you line up your financing options for your investments if you have not done so already.

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Chicago, Illinois

Originally posted by @Rashad Jones Jennings:

Originally posted by @Mike Hanneman:

I have investor friends that only invest in D class multifams, they have good systems in place, but they have been doing it for a long time. I personally wouldn't invest in D properties if you are newer to REI investing. It's a easy way to get burned out quickly.

Definitely don't want to get burned out but I see it as my way in. Its hard finding B&C properties in Atlanta. So I figured id go where no one else wanted to go. With good property management I think I could make it work. At least to get my foot in the door. Does your investor friend that invest in D properties have a podcast, youtube channel etc?.... I would love to learn how he's doing it with D properties. Theres so many of them laying around here that I see opportunity.

If you KNOW your area deeply then there is a great opportunity for you. Riding the gentrification train it will stop in one of these D areas. Knowing the drivers and amenities of what would make the next D community valuable in such an event is beneficial. There D communities right next to universities that can be plus, as an example.

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Originally posted by @Kyle Lane:

I'm going to start by apologizing if I have posted my question in the wrong spot. I have entered into a partnership with a local investor in my hometown. He advises me against financing deals that can't be paid off within 10-15 years. I found a 12 unit apartment that could feasibly cash flow 1k-1.2k per month with a 20 year note and 20% down. I came to this conclusion using the BP analysis tool. I have to do more research on the deal but I think it's defiantly worth looking into. If someone could please point me to some insight on what would make a good or bad deal based on amortization periods I would appreciate it thank you.

How did things turnout?

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Originally posted by @Fatima Champagne:

I located a foreclosed home that is selling for $180,000 and has a zillow estimate of $430,000-$500,000. Similar homes on the same block and area have sold from $385,000- $439,000. The home needs repairs that are quoted by the seller as around $50,000. My question is first: what type of information would a private investor need in order to proceed? Also - I am new to real estate, no prior home ownerships, no wholesaling experience, nada, zilch - but I'm looking to move forward. With the necessary fixes, I will be able to refinance the house and pay the investor plus their percentage but how do you locate a potential partner if your own portfolio comes up short? I recently signed up for a local real estate group, so I'll be joining in on our weekly classes next week. I look forward to meeting potential collaborators, mentors, and like-minded individuals - but would like a bit of guidance in how to even go about RE proposals if you have no proof of your own success.

Congratulations on locating a promising deal. First and foremost, in my view, you need a good idea of how much and what type of work is needed in the place. I highly recommend looking yourself and at least bring someone who has some sort of paid contractor work experience. Track down some of the comps that have sold in the area to see how close and similar they are to your subject property. If the numbers work out as you stated at worse you can partner with someone and receive an equity stake in the deal or receive a flat fee payout and some mentoring/coaching if they are experienced in the field. All the best.

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Originally posted by @Tedros Fremichael:

Hello, I am considering buying a 6 unit apartment building so I'll need a commercial loan and this is my first building. My question to all experienced investors is what should I know when seeking a loan and the process. I am a full time residentail real estate agent and I own a home possibly looking to pull equity from, I have around $50k cash and plan on pulling money from a 401k for a down payment. I also have a co-signer if need be. The building Im looking to acquire makes $6150.00 a month. Just looking for advice and guidance. Thanks

Congratulations. The purchase makes a difference. How are you going to hold the property (in your personal name or some sort of business entity)? Start reaching out to local lenders in the area. Since this is your first rental property they may require that you have the property professionally managed. Knowing that now would help a great deal.

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All Forum Posts by: Calvin Lipscomb

Calvin Lipscomb has started 25 posts and replied 309 times.

Post: Potential tenant has bad credit and a DWI

Post: Investing in Multifamily "D" Properties

Post: What to know before buying a 5+ unit apartment building?

Post: For those focused on BRRRR...

Post: Investing in Multifamily "D" Properties

Post: Who's investing in multi-family in Chicago?

Post: Investing in Multifamily "D" Properties

Post: Financing Investment Deals - Important Read

Post: Private Investor Inquiry - Seeking Private Investor

Post: What to know before buying a 5+ unit apartment building?