All Forum Posts by: Chris Grenzig

John Cushing still keep my eye open for a possibility to do a flip, but currently focusing almost entirely on multifamily in the southeast and Midwest. That being said we're always trying to find ways to do deals on Long Island because it'd be great to do some stuff in our backyard.

Jack K. I have no experience with Airbnb, but if you should happen to think about going out of state multifamily let me know, that's what we specialize in. I just moved to Bushwick a few weeks ago so we can meet up and have a chat if you want. If not best of luck with the duplex!!

@Drew Shirley the biggest challenge when syndicating deals is keeping investors interested while simultaneously trying to find deals. If you can do that well, than you will have a good foundation to start from. The best thing you can do with the investors is to set expectations slightly lower, and gather interest on a deal that can return you x percent. That way they know what to expect, that you may not have a deal for them right away, and that when it does come up they'll be more comfortable with what to expect from it. Also, if you can get the to "commit" to a dollar amount should that type of deal become available it will just make you're life easier in the future.

For example, if you tell them that you're looking for 100+ units, in these 5 (hypothetical) markets, that's 1980's built or newer, 3-5 year hold, an 8% preferred return with a 70%-30% split over that, and should return 6-12% COC and a 15%+ IRR to investors...than when you bring them that deal they're already mentally prepared to expect that.

However, if you just told them you're looking to invest in a 100-400 unit multifamily building soon and are they interested? Well, they might be thinking in their head they want at least a 20% IRR in 2-3 years only. That money you thought you had is now gone.

Also, something we learned the hard way, if you need to raise $1 mil, plan on raising $2 mil because ultimately when push comes to shove, some people that hypothetically said yes will say no, or invest less. And if they don't well, you're all good because you only needed the $1mil!

@Michael Arreola The idea of turnkey is great. However, the execution piece isn't always there and I also think that a lot of people expect a turnkey to be less of an investment and more of a guaranteed return. All turnkey really is, is just buying an investment with the rehab done and the systems already in place. That however does not guarantee that the systems in place are good and or going to work in the future.

Also, just because someone shows you some spreadsheets and some numbers on paper doesn't mean they are "right" or tailored to you're level of risk. Just by changing something like "market rent growth" from 1% a year to 3% a year will drastically change you're returns. You really have to go over the numbers, play with them yourself a little bit and ask questions if you're not sure of something.

All that being said there are some great companies out there that do a great job for people.

@Phillip Kim why not both? Can you start a business around real estate in some way shape or form? Being a real estate investor is definitely a type of entrepreneur in my book.

@Jorge Mendez Jacksonville is a great market that we love and there's tons of C properties in the size and space. When trying to find a market to invest we always tell people a few things to consider.

1. Do you have family somewhere? Start in that market and see if you like it, if not then move onto the next

2. Is there somewhere you like to travel to, know well, or would like to go to regularly? As a property owner you should be going to check in on your property fairly regularly, so you should like the area you're going to.

3. How far away do you want to be from your current location? How easy is it to get there? Drive or Fly? Are there any direct flights? How much do the flights cost? etc...

4. Pick some "bigger" markets and then look at the surrounding submarkets and see if there are any you like.

We have JV'ed with people in the past who have brought deals to us that fit our criteria. If you want to chat let me know and we can set something up.

Hopefully that helps somewhat!

@Sam Lee I'll just touch on the upgrades you're looking to do. If I read this right you think if you did $5000 a unit to put in W/D and $5000 a unit in renovations you can get $100 premium a month per unit. That's quite frankly a poor ROI.

$100*12 = $1200 / $12k spent is a 10% ROI on that invested capital, so it will take 10 years before you get all your money back! Usually we look for upgrades to be 20% or higher because often times the upgrades won't last that long or it's just more likely they'll need another injection of cash.

However, if it was $12k for every unit to be upgraded, than this is great because it would be:

$400*12 = $4800 / $12k = 40% ROI or 2.5 years!

Even if it was $20k to upgrade that is still a 24% ROI.

@Leona N. Do you mean that you'd just being doing a ton of work for 4-5 months to get it up and running or this will be a 9-5 for 4-5 months? If it's a 9-5 I wouldn't pay anyone wages, if it's just hard work it might not be a bad idea. 

If you're using other investments to finance the other 35% I would look at the return you're getting on those investments vs. what would/could be making in cash flow if you used that money for the 35%. Leveraging other investments for the other 35% is definitely more risky, but if you have a job that's bringing in money every month and can cover the mortgage expense and the other 35% than it could be a good option.

Personally, I'd probably move the money and pay the 35% because in case something happens you're less exposed, but I'm more conservative by nature. 

@Tiffany S. Two routes I see you going. 

1. Wholesale it for a finder's fee to someone that has the money.

2. Find a Joint Venture partner and negotiate an equity stake where you put up some money (or none if they're cool with that), time and finding the deal in balance with the capital and/or time and expertise they have. We have people come to us with JV opportunities all the time and we'll gladly do it because while we bring a lot of the money and expertise, we spent 0 time finding the deal, just making sure it works.

Hope that helps!

@Andrew Lee if you lever the $250k into commercial you should easily to be able to find a stable cash flowing multifamily in the Memphis area. A multifamily in Memphis at $40,000 a door would buy you roughly a 25 unit. Discount it for closing costs, capital to improve and other possible costs, figure 20 units at $40,000/ unit gives you "$200k" in wiggle room. Maybe I'm misunderstanding the situation, but if you have $250k in capital I think there's much better options out there for you. 

If you don't want to go above $600k total value (reading that right from above?) buy a 10 unit or a 15 unit. Or maybe I'm not fully understanding the situation. If I can be of any help let me know! All I know is if you have that much capital, you should not struggle to own a solid property that is cash flow positive.