All Forum Posts by: Charles Soper

Rodklheif.com

So as a general rule, anything 4 units and under you can do the same financing as a single family home. The BP calculators will handle those numbers. When you get bigger than that you are no longer looking at comps in the area directly, but at the performance of the property in terms of NOI (Net Operating Invome: revenue-expenses). There might be a simple calculator you can download for free in the file center but I would suggest you find another website that focuses specially on commercial multifamily. Personally I like Joe Fairless's Syndication School done with @Theo Hicks, syndicationschool.com, for the education part, for the calculator I know of two, but you'll need to pay for them, one is at Themichaelblank.com, and another by David Toupin at obsidiancapitalco.com. I also like Rodklheif

So are the 4 units identical and rents just haven’t been raised equally or are the cheaper units smaller?  If the same size bringing all rents to market at $1100 give you an extra $700 a month.  Also, bill back the water AND install low flow toilets and faucets, ideally you could separate meters but that’s a capex expense that probably wouldn’t figure well into your numbers at purchase.

Have to agree with @Scott Mac on this, it's all about your risk tolerance. You can probably find a HML or even a private money guy who would do the loan as long as you bring a plan with some educated guesses on NOI, cap rate, and value but stabilizing 50 units without at least some history of the property or area seems like a big hairy audacious goal to achieve. Good luck and post updates, would love to see how this works out for you!

This has been on my radar for the last 18 - 24 months or so.  I forget where I first heard about it but much like people doing stated income nothing down mortgages 10+ years ago, auto loans are the new sub-prime market waiting to burst.  For many years you've been able to drive through a C or D neighborhood and see a run-down shack with a Mercedes, Lexus, or Tesla out front, at least in the AZ and FL suburbs where I've lived in the last 10 years.

Good news for those that will be in the market for a nice car in the next few years, they'll be available for pennies on the dollar!

Hey @Fernando Navarro, welcome to BP!  What kind of multifamily investing are you looking into?  Small 2-4 unit properties or larger 5+ commercial type properties?  Much of what applies to single family home investing applies to small multifamily just at a multiple.  5+ units is a whole different animal with it's own set of benefits and rules.

Give us a little more about where you think you are headed and goals and maybe we can steer you in a more precise direction.

Hey @John H., looks like an okay deal. Personally for multi-family deals I prefer closer to $200/door cash flow but that's me. It looks like you've accounted for all the major expenses and they all seem within average deal parameters I would use. Depending on the condition of the property I might lower CapEx to 5% and raise Repairs/Maint. to 10%, but that's kind of splitting hairs. Looks like you've got a sweetheart of a loan, is this going to be seller financed? If not, where did you find a 5.2% loan? Also what's your term? With the market where it is what's your term? Anything shorter than 5 years would be concerning.

Last observation, from a BRRRR perspective the difference between your purchase price and ARV is thin. If you're plan is to buy and hold and you don't have a problem leaving $60k+ in the deal then awesome, but if you're goal is to BRRRR then you need to either buy lower or find a way to make the ARV higher, forced appreciation.

Hope that helps... 

Another BP article regarding being an LP and the risks/rewards: https://www.biggerpockets.com/renewsblog/limited-p...

Hey BP,

Anybody have a good source for current cap rates?  Specifically I'm looking for the Sarasota-Bradenton-North Port MSA rate but a good source for state, regional, or national would be great.  I know local commercial brokers are probably the best source for this information but I'm trying not to bug them every month or two with that request.

Thanks!

Agree with @Luke Miller and @Greg Dickerson, systems and larger properties. You could 1031 into larger B and C class properties in good or gentrifying areas and get rid of the “chasing tenants for rents” inefficiency.  Can’t really speak to the commercial spaces but it would seem that just staying on top of the city folks to get your approvals so you can finish is key, get it stabilized and move on.