All Forum Posts by: Connor Stark

Hi BP,

What platforms, businesses, methods, have you been using to improve your investing? As we continue down this path towards an ever more online integrated society, what has been worth it for you to implement into your day to day?

Connor

Hi BP! I'm looking for someone who has gone through the process of obtaining HUD financing and what their experience was like. I've heard many positives and a few negatives, but primarily from individuals who want us to use their services to acquire the loan. We are looking to refi one of our deals, and given the timing of the market we are looking at ALL options. HUD sticks out to us because it would help to be able to get a loan with a lower DSCR requirement and a loan that amortizes over 35 years instead of 30.

Now I understand the process can be long, and that the prepay can be astronomical, but I wanted to hear from those who have actually gone through the process. Please let me know your experience.

@Jay Hinrichs

Thank you for connecting Darrin. I'd be happy to set up a call if he has the time.

@Jordan Moorhead

I have not reached out to them, but I can do so tomorrow! Thanks for the recommendation. 

Hi BP Community,

It's been a minute! I have been working diligently on building up my real estate business. My partners and I went full cycle on a 27-unit in Phoenix, exchanged into a 92-unit in San Antonio. We are approaching the completion of the remodel process. Unfortunately, we are one of those groups that will be searching for a refi option in this current climate as our bridge loan rate has doubled. 

What I want to bring up today is in regards to the insurance. I want to know if any investor in Texas has been successful in finding attractive insurance premiums. Currently we had to bite the bullet and pay a premium that's astronomical, I'm talking $1,100/unit. Originally we purchased the property with a policy that was about $900/unit (still bad) - we had to switch due to us changing property mangers while being under their umbrella policy. The reason the premium went up after that is because the occupancy was lower since we were remodeling. 

We we stand today is that our occupancy is trending back up and we've done about $1.8mm in upgrades. We were thinking we'd now be able to find more competitive pricing on insurance. The insurance broker has yet to find an option for us. I'd be grateful for any guidance here as to different avenues we can take to try to minimize this expense.

A couple other items that may be important:

- The property is 60s Vintage 

-The electrical panels and wiring has all been upgraded

- C Neighborhood 

Look forward to hearing from some of you!

Connor

@Colton Loretz Yea we do use Pro Desk and it helps! 

Hi BP,

My team and I are remodeling a 92 unit in San Antonio. I wanted to reach out to see if anyone has any creative ways to cut costs when buying materials for the units. 

A lot of times we go through home depot, or we have our PM handle it. Our current property manager has their own sister company that sells materials, and we've been going through them. The prices are fair, but they are bland and the quality is decent at best (see part of catalog below).

For example I can get a modern style kitchen faucet with matte black finish off of Amazon, with very positive reviews, and have it cost $45. Over 100 units, that would be saving $3,000 for a better looking finish. 

When dealing with large quantities of flooring or other material, I've heard of owners potentially going directly to suppliers/warehouses. 

Has anyone had any success in creatively sourcing materials for larger remodel projects?

Connor

Hi BP,

I'm looking to expand my network within the city of San Antonio. I've been networking and educating myself on the city for the last year. My partners and I acquired a 92 unit building that we are currently working to stabilize. 

As the process has become streamlined we are trying to buy another deal. Hopefully in the 100+ unit range. We like San Antonio a lot and I would be happy to connect on all things Real Estate in the city. 

Connor

Hi Agraj,

My group has been traveling a similar path. We got excited about San Antonio about a year ago and have watched it progress rapidly. 

One of the qualities that attracted us to the city is that it is known to be historically very stable. It's never seen a huge boom such as markets similar to Phoenix and Austin, but potentially now is that time. 

For instance we purchased a property for 67k/door 6 months ago (granted it needed a large lift), and we can't find anything similar to that deal just half a year later.

It's a huge city in a state that has seen tremendous growth. It's very close to Austin, and the corridor is home to San Marcos + New Braunfels which are two very cool cities experiencing extreme growth as well. There's also a lot of good signs when visiting the city. If you make your way out there, check out the neighborhood Alamo Heights, visit The Historic Pearl. There's nowhere near the 'trendiness' that has taken over Austin, but you can sense a similar vibe in certain parts of the city.

Connor

Investment Info:

Large multi-family (5+ units) buy & hold investment in Phoenix.

Purchase price: $2,150,000
Cash invested: $450,000
Sale price: $3,635,000

GCM purchased 2020 W. Orangewood (27 Units) which was an under performing asset in an up & coming neighborhood of North Central Phoenix. Through upgrades to both the interior and exterior of the property, GCM increased The Mojave's net operating income by 2.1x. The rents were increased on average by $300/unit.

GCM sold this project fourteen months after acquisition, capturing a 55% return for the Limited Partners.

Deal Highlights:
14 month hold
55% ROI for LPs
Successful 1031 exchange

How did you find this deal and how did you negotiate it?

We found it off market through an agent that we met while visiting the city.

How did you finance this deal?

Bridge Financing

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $6,140,000
Cash invested: $2,500,000

This is a 92-unit deal in San Antonio that we purchased and are currently remodeling!

What made you interested in investing in this type of deal?

GCM targets value-add multifamily properties in up and coming markets. We liked this deal because it was a heavy lift that most groups were too nervous to take on. One of the pools was uprooted from the winter freeze. The property needed be converted to a HVAC system because the two chillers were broken. A sewer line needed to be replaced. We know if we can get this property turned around that we can supply a good tenant base with a comfortable home all while making a good return for investors.

How did you find this deal and how did you negotiate it?

We found it off-market from a local agent who we met through networking.

How did you finance this deal?

We used bridge financing and will refi once the deal is stabilized into a permanent loan.

How did you add value to the deal?

We converted all buildings from chiller systems to HVAC. We removed the obsolete pool, and added a BBQ/Dog park to the list of amenities. We are doing a full interior renovation of the 92 units. We are painting and rebranding the building as well. We fixed all plumbing issues big and small at the site.

What was the outcome?

TBD - but we are very optimistic.