All Forum Posts by: Cody L.

I might be interested.  But you'll need to send me the address

Because San Diego is paradise.   I've been to a lot of places.  Not much beats the beauty of SD.  Where else do you get views like this on a random Dec night. 

 Bottom line is this:  It's almost an economic rule that the nicer the property or location, the more likely the cost to own is going to be more than the cost of rent.

If you think about it, the reason why is obvious.  If the cost to own a nice property in a nice area was LESS than rent, then everyone would want to buy them to rent out as they could own something nice in a nice area and cash flow.   Which drives up the price, which makes it so the only people that will buy nice properties in nice areas to rent are those that don't mind a lower return.

Likewise, if it's a bad property and a bad aera, less people will want to buy them in order to own for cash flow.  This causes the prices to drop (relative to rent) till the cash flow becomes so strong that people start buying.

What *I'D* do with $5m cash?   More of what I'm doing.

Likley find a good multifamily in Houston.  Class C building in a B or better location.  I'd aim for something with recent distress due to interest rates.  Try to target about $50k/door for some ~$800/month rents.   

Buy two different ~80 unit buildings, with about 50% LTV from a freddie loan (to get ~6.5% rates). That's 160 units. With a good 3rd party management company you're doing pretty well with the $4m invested.

Then I'd toss the other $1.3m into short term (~5.5%) treasuries to make an extra $70k/year of interest income.

In a few years, after the market has gone back up and I've added some value, I'd refi the two buildings with a local bank.  With higher LTV (~75%) and a stronger basis, you should get all $4m you invested back.

Then I'd do the same thing again.   Take those 160 units and rince/wash/repeate

PS, this isn't something that "Well if I were you I'd..."  This is something I'm doing.

So there ya go.  That's your plan.

There are a few brokers in Houston who do most of the deals (I won't give their full names but people like Tom W., Brian J, Shayan H., Jim H, Ryan M., Matt S.)

I'd say 90% of class C multifamily (or nicer, in the case of Matt S.) pass through their hands or the company they work for. 

Call a few of those guys.  tell them what you're looking for.  They may be hesitant to just give you their buyer contacts but some might.  Or maybe they'd be willing to FW an email from you to them.

Each of them would know at least 3-4 people (even if there is a lot of overlap) that fit what you're looking for. 

 Yeah, I realized the irony in my reply also bumping the thread.  Doah!  Ya got me

I agree.  If you're not looking for cash flow and want to bet on appreciation (not a bad bet for San Diego, historically), there isn't many places that are better to buy multifamily.   Especially if you can buy under market and get some day-1 equity to help speed things up. 

I don't think anyone in Houston with a large portfolio exists on this site.   The ones that claim to be big shots are scammers I bet.

 I hope you do well with it.  I've never found a way to succeed on a deal in San Diego but I'm happy that others have. 

 "Bumping" your own thread?  Common man...  :)