All Forum Posts by: Chase McArthur

@Andrew Clark

Excellent! As far as a good contact goes, not self promoting here, but Marcus and Millichap would be a good contact. Mainly because we specialize, and also our bread and butter is that $1M-$20M space. Specialty assets are a harder niche for investors, it is typically occupied by larger institutions but it's worth a crack at. What area are you looking?

@Andrew Clark

That sounds like a good criteria and you definately have the right mindset in regards to diversification. However, there is one thing that you need to consider when approaching a senior living property. Most investors tend to overlook the higher propensity for lawsuits when owning special housing assets, especially senior living, for obvious reasons.

Food for thought...

@Anthony R.

You always want to keep growing. If your money is sitting still it stagnates. Thats the hardest concept to convey to my prospects. They get a property, stabilize it, then want to hold on to it for 3 decades. As an investor you should want to GROW your wealth, and you can't do that by standing still. IMO, once you reach market rates hold it for 3-5 more years then sell up. Ride the cycle.

@Jim Growfer

If you ask them about it they will more than likely tell you no. How I managed to get the offer is I scheduled a call regarding the professional tier. They called me and after the demo I was like "that's really awesome, but $5k? I could probably do it but..." Then I waited. Of course he then tried to resell me on it but after I told him I really wasn't sure of the value he told me he'd talk with his manager and call me back. The next day he offered to break it into monthly. When I pressed back he suggested the next package down and keep the monthly payments. So basically I got offered the second tier for $200 a month.

I'm still debating on getting it but my only draw back is only getting 250 contacts a month. At my call rate I'd burn through that in a week. And like I mentioned earlier, you won't know how accurate the data is until you start calling. Even if it's 60% accurate thats 100 leads that were worthless. So now I'm paying $200 for 150 leads and I'm locked in for a year.

@Gabrielle T.

3 letters...LLC. Syndicating a deal through a partnership LLC should, in theory, insulate you from any potential litigation. I say "in theory" because this highly depends on the enitre legal structure of the partnership. Make sure you hire a good attorney to assist you.

@Mauricio Ramos

Aside from the obvious wear and tear of older buildings, you said it. Historic Review Boards can be the devil incarnate. Depending on how stringent they are it could definately increase your CAPEX for the property. Aside from that any exterior improvements you do must be approved. Like HOAs they typically have preapproved companies and products that you must use...and they arent the cheapest either.

I can tell you from experience in dealing with the HRB in Georgetown DC, it was an absolute nightmare.

Most of the properties that exist there are horrendously outdated due to the headache and the amount of money required for up-keep. For example: an investor that I was working with wanted to polish up the exterior of one of his properties by redoing the exterior architecture and replacing 12 windows. For any other building elsewhere it would have cost him roughly $15k-$20k to do so. However, considering the HRB had a preapproved list of contractors and products, the windows alone were over $24k due to the architectural requirements. To redo the rest was close to $52k because he wasnt allowed to replace anything, only restore.

Your HRB may not be as nightmarish but just be sure you do your homework.

@Brett Abamonte

Another avenue to get your feet wet would be to call commercial brokers that specialize in multifamily and talk with them about lead generation.

As a broker myself, I know that a great deal of time is spent databasing and creating proposals. As an intern, you obviously wouldn't be paid on the front end but a lot of times brokers will break you off a percentage of their commission for any leads you create that ends in a deal.

Doing this will get you into the CRE space and allow you to speak with active investors as well as help you understand how the whole process works. It will also educate you on how the markets work as well as how to source deals.

The biggest advantage of working with a broker over a single investor is the level of exposure that you would have to a variety of investment deals. So instead of shadowing a smaller investor, who would only really work at most 2 or 3 deals a year, you could be exposed to dozens of deals of all different sizes and scope. Rarely will you find a local smaller investor who spends more than a few million on a property whereas shadowing a broker would expose you to anywhere from a $1M deal up to and over $20M deals.

Send me a PM and we can talk about it more.

@Au Jia

What exactly are you wanting to know?

@Gino Cook

Can you get the actual numbers from the current owner?

If they have been individually appraised (which I hope they have) then you would take the aggregate of the total value of each property as well as the aggregate of the income and calculate the value off of the local market cap rates. However, it gets more complicated, typically portfolios have either a premium or a discount added to the value depending on the diversification of the portfolio as well as the overall condition of the properties. 

Properly valuing a portfolio takes a decent amount of time and patience. Be very careful here, it sounds like this could be a game changer for you. You do have a current portfolio of 9 and adding 60 more requires a very carefully laid plan for management. 

Do you know what the value of each property is? Have they been appraised recently?