All Forum Posts by: Adam Menconi

@Stevecook,

I'm constantly looking at out of state investments but have yet to do so.

I'm located just up the 101 from you.

What areas are you looking at?

Best,

Adam.

@donkonipol

Thank you for the kind words.

Although I'm a professional at my business, I've obviously new to the site so I'm still learning. Am very impressed by the responses, encouragement, etc that I've received very quickly on a Sunday afternoon.

Am excited about continuing to participate on the site.

Thanks again.

@jscott

Thanks for the recommendation and the comments.

I will be doing just that.

Thanks again.

@jmartin

Thank you for the recommendation.

To clarify, what I will normally do is look for equity partnerships whereby an investor can get a bare minimum 8% preferred return and secure the property with 1st trust deed at 6%. I don't get any money until they make money. If I'm wrong on a property, I have my own funds to pay the investor back or (as happened in 2005 when the market crashed, I worked for a year at no cost to get my investor back his money).

I can see why what I said can be confusing. I only use the debt as security but its not just a debt position, its also a 50% equity position in the Net Profit. They can be involved in the process if they like, but I've been running construction crews for years and have my team ready to go.

If I can simplify it, an investor gets

1. 1st trust deed at 6% to secure the property

2. 50% of the Net Profit on sale + the accrued 6% for the 2-4 months of hold time

3. The least they would get is an 8% return, meaning that if a deal ever went bad and the total profit was 9%, the investor would get his 8% before the additional profit 1% is split. Not a good deal for me (and you can't make every deal a home run) but its an opportunity to show an investor that I follow through. I've been in that situation before (in 2005) and that old rule still applies to real estate . . .

the RIGHT thing and the HARD thing are usually the SAME thing.

My current investor can vouch for this as well.

Hope that clarifies it a bit.

Thanks again.

Adam.

@paultimmons

Thank you for the response.

I've been so involved in the deal side for so long, I can't remember the last time I attended an REIA meeting but agree that it could be time to do so.

I do like student housing but my niche for multifamily is more geographically specific to where I live. If I go out of state, which I am contemplating, I have heard that if done right, student housing is a great niche to have.

Thanks again.

Adam.

I am currently looking for 1 to 2 additional investors who would like to achieve a minimum of 10% passive returns for their money in 2014.

I'm not a newbie, been in the business since 2000 and have a proven track record that I'll be glad to share.

My focus is two fold. I target cash flow multifamily and apartments in need of repositioning in Northern CA and I also reposition (flip) houses.

Basically, Long Term Cash Flows and Short Term Flips . . . it ain't rocket science ; )

My 2013 results are:

Flips generated an average 66% annualized return while

the MFRs generated a solid 10% investor return along with achieving large appreciation through buying off market.

Investors are secured with a 1st lien position and additional measures to make sure they are protected.

2 examples of real deals this year are as follows: (please excuse the simplicity as I'm leaving out carrying costs but the max hold time is usually 90 days)

House A

Purchased $350,000

Closing Costs $1,343

Taxes/Insurance $2,150

Repairs/Remodeling $116,230

Permits/Additional Structure $13,420

Commissions (-5%)

Sales price $665,000

Total profit of $148,607 (Total Investor Return is based on cash invested along with 50% of the Net Profit) In this case, it was around $80,603.

Fourplex A

Purchased $341,000

Rents at purchase $3,200

Closing Costs $1,400

Taxes/Insurance $342/mo

Prop Mgmt $300/mo

Maintenance $150/mo

Utilities $330/mo

Repairs $16,000

NEW Rents at $5,000/mo

Total Investment = $359,400

Total value based on comps and income= $515,000

Equity created = $155,600

Investor Returns- (6% on money invested) $1,707.15

(50% of Net Income) $1,048 = Total of $2,755/mo

$2,755/mo = $33,061/yr and a Cash on Cash Return of 9.6% annualized with zero leverage as well as $77,800 in instant equity. Once I refinance this property (in the process now), the cash on cash will of course increase dramatically.

These are not projects I looked at or found online, they are projects I dug up through my contacts locally/nationally and found here in Northern CA that made my investor a substantial amount of money.

I have been fortunate enough to have 1 investor for most of my investing career but am opening up the possibility of working with 1 or 2 new investors for the first time. My current investor is not able to proceed with the rate I am finding/funding deals but is a partner on my multi family cash flows, a big fan of mine and will be glad to get on the phone with you to talk about working with me if decide its something of interest.

I'm very easy to work with but have never desired having tons of investors. I enjoy establishing solid trust based relationships with good people and making them large amounts of money (along with creating a good life for my family and I).

Of course, past projects are not a guarantee of future results and this is not a solicitation of any kind.

Again, sorry for the simplistic P&L, I have detailed analysis at my office which I will email if interested.

This is my first post on BPs and I hope I'm doing it right.

Thanks for your time in reading this and Here's to a Very Profitable 2014!

Best,

Adam.