All Forum Posts by: Chris Jackson

@Michael Ouvrard congrats on your momentum.  Keep it going.  That's the trick.  We have picked up 20 SFRs since February this year.  Contact me directly and lets compare notes.  I love discussing tips and tricks on how to scale a business.  I get great ideas and think about new processes and strategies from others that are on momentum streak.  Congrats again.

@Louis Ciotti contact me directly.  We are quite active in the Syracuse market.  I have the local contacts needed if you are serious. I can point you in the right direction.

@Account Closed 

Your 7-10 CAP areas as a broad stroke statement on a market are going to be your secondary markets and most likely tertiary in the current market cycle of multifamily. Also in the secondary and tertiary market but more towards the inner city you hit those 9-10 plus caps.

@Marc Orlando contact me directly. We have multifamily in Syracuse for many years and this year have picked up 20 SFRs in Syracuse.  

I have the contact you should call in the area to help find you one if you are serious.

@Danielle Fattizzi can you contact me directly and let me know the markets where you are wholesaling apt buildings. Thank you

@Matt Harris

One thing I would like to add is, buying empty houses, rehabbing them, placing a tenant and all within the needed quick timeline and price is not easy to pull off.  This is why turn-key exists.  One pays the premium for the end product but its way more passive to fully passive. But due diligence is still required by the buyer which gets forgotten most of the the time, both on the turn-key provider and the property itself.

Due diligence is needed by an investor for any type of business model.

@Account Closed provided Occam's Razor.  

the simplest explanation is usually the correct one

@Matt Harris

We prefer empty houses.  Adding the same price qualifier turnkey vs empty for this scenario I would still say empty house because of the reasons given such as picking the tenant. However turnkey usually costs more then what an investor would pay for purchase, rehab and closing costs. For turnkey most of the time, I am not saying all, but most of the time the buyer is paying a premium for being more passive.  All the work has been done for you and one just gets to sit back and hopefully ride the cash flow.

For us we prefer to have more equity on our ARV, pick the tenant and this is a biggie, we tend to get better rents because we know exactly what to fix and make rent-ready to get max rent value.

Having said all the above we have taken on essentially a no rehab, tenant in situation.  Cash flow day 1.  I will tell you though we paid at a discount because we do prefer vacant.  The rent is lower then we normally can achieve and we are inheriting a tenant.  Yes we are cashflowing day 1 which is nice and part of the calculations made on the offer, but overall we paid less than the vacant house equivalent (even if you factor in the rehab costs that this house would need if vacant)

To be honest I have offered even lower recently on a tenant in situation and did not get the bid. I lost no sleep over that.

Sometimes you just have to find your model and not veer from it.  Tenant in feels like veering now so we are sticking with empty houses.

Hi @Marcus Proveno welsome to BP.

In my area , east coast on Long Island we have a variety of groups.  There are some that are more focused on residential (flipping, wholesaling, etc) but there are a few that concentrate multifamily and or commercial.  

Contact the REIA organizer of some of the groups. Sometimes even the resi focused groups have concentrated commercial segments.

Chris

"@Anton Ivanov I mean if I'm buying turnkey it's going to be at market value so my 20% down will stuck there until equity is paid down in the event of great appreciation(which I'm not counting on) before I can cash out refi."

@Anton Ivanov  usually with the turn-key options they are cash buys.  In that case if you did buy turn-key with cash you could in fact cash out refi after the lender's seasoning requirements. If the cash flow numbers work with the new cash refi debt on the property you would in fact get 70-80ltv  cash back and use those funds to buy your next, maybe as the down on your next bigger property using the right kind of leverage.

Here is the rub, you do need that cash buy to get the first one.  If you don't have the cash you need to partner up with someone who does. The profits get smaller for you obviously but thats how the cookie crumbles.

When I see the word scaling used. This is actually how you scale,  Scaling involves taking a little of what you have and being able to do more with it.  In most cases in business when you scale, you must reinvest all or most of your profits to scale.  I think this is what most people miss when they think 'scaling'.

When you start making money in real estate and want to make more, very often one must take the plunge to hire more staff, outsource more tasks to allow you to do more of the more money maker activities.  This takes a leap of faith.  That leap of faith come with giving up alot of the recent found profits to get to the next level that you believe you can get to.

Scaling also comes in the form of reinvestment.  I received a massive cash out refi check on a multifamily property and I must tell you setting most of into new investments was challenging. I just wanted to stare at the money in the bank and look and it and me feel all warm and fuzzy.  But I knew the money was not working for me and that is the essence of scaling.  I then used that money and parted with it, eeeeeek, to buy more properties that provide more passive and equity upside. 

So to answer your question, get one deal done however you need to do it where the numbers work and then you figure out how to scale. But know that scaling involves giving up a bit to get more. Sometimes its also about giving up alot to get alot more. I am not talking about taking all your profits and going in for one big score that will triple you up.  That can work I have seen it done but now you are talking about gambling.  Scaling is about smart strategic decisions.

I think about scaling and its chess game 30% of my day.  Whats my next move?  Am I hedged enough?  How do I offload certain tasks to do more?Is the cost to offload worth the money? What should I do as the next move for this profit?  Are they systems helping us get faster quicker better?

Think about your first deal then think about scaling.