All Forum Posts by: Kevin Young

@Bobby Narinov Wells Fargo. I order the deposit slips directly from them. 

@Tyler Veres I've done a few things to force appreciation with my MF buildings. i've boosted my NOI both by increasing income and in one case reducing expenses. for context, my buildings are in the SF east bay market and honolulu market, both with low cap rates.

a few examples of what i've done.

1) added washer and dryers.  5k investment added 28.5k (2k additional income/7 cap)

2) raised rents this year by 6k. added 85k in value (6k additional income/7cap) 

3)  rezoned the building from business to residential. saved 8k in property taxes. added 133k in value (8k reduced expenses/6cap ... different market then the above building)

james, I'm not a broker, but invest exclusively in commercial RE ... I took the CCIM courses and found them helpful ... I'm still working on my portfolio requirements.  

IMHO, most of the CCIM brokers I've worked with have a MUCH better grasp on the numbers, markets, etc. I tend to primarily work with CCIM commerci brokers...I've just had better experiences with those who have the CCIM designation.

for more on requirements, check out the CCIM site: http://www.ccim.com/portfolio/candidate-portfolio/...

@Quint Beniers i suggest you start by asking a different question:

"what is your capital partner's ROI goal?" 6%?, 10%?, 20%?

once you understand his goals + the actual numbers behind a deal, you can determine:

a) is it a good investment for either of you  i.e., if you couldn't meet his goals with a 100% of the take, then is not good for either of you.  he's disappointed and you worked for nothing.  this is extreme example to illustrate the point. 

b) assuming the deal can support his investment goal and you're not working for free, then back into an equity split in such a way that he gets what he needs and (there should) be some left for you.  i've seen syndicators take as little as 15% and as much as 50%, adjusted to deliver the expected return to the capital partners. 

personally, i like to see preferred returns to be paid out to capital investors before any % split kicks in.

i'm sure he has expectations and you should discuss and understand what they are before you partner.   from there, its just math to figure out a fair split.  

Peter Gray Agree with Ben Leybovich the numbers look good. If they are real, I'd buy it. (I assumed 10% vacancy and higher expense, 50% of the gross, and it still pencils nicely.) But verify all income/expenses, back 2 years if you are able. Take nothing for face value. Given you mentioned it's an older blding, have a good inspector take a look as part of your due diligence...There may be hidden expenses and deferred maintenance that could haunt you later. btw, I grew up not too far from you. Good to meet another Wisconsinite :-)

hard to say without all of the numbers. Offer price? Income? Expenses? Rehab costs?

@Caleb Charles i started with rent manager and my property manager is still using it on my out of state properties.  it doesn't work natively on a mac, so its clunky for me to log in remotely.  we pay $50/mo  for these reasons, i'm not a fan.  

i use buildium on the buildings i personally manager, its pretty robust for the cost, $40/mo  i'll be fully transition off RM and over to buildium soon.

buildium also provides a web portal where people can apply on-line and from that point, everything is managed electronically. once people apply, you can initiate background/credit checks from the tool. for someone who self manages, its a pretty clean and easy solution.  buildium was the best solution for the cost ... at least 2 years ago when i did my research.  if you find a better solution in this cost range, let me know.   most companies provide a free trial period, so worth shopping around to see what you like. 

regarding rent payments...i'm not an advocate of accepting checks in the mail.   i require my tenants to deposit directly into my bank 'rent deposit' account.  i include this process in my lease and its their responsibility to get to the bank and make the payment.  my rent is due on the 1st, late on the 6th, so the 5 day grace period gives flexibility to account for weekends/holidays when the bank is closed.  i provide deposit slips for each unit that includes the unit #, so i can track who deposited what, and when.  my bank scans the deposit slip and check for me view online.  on the 6th of each month, i just log into my bank account, verify that people paid on time, then sweep the money out to my operations account.  2 people are late today -sigh-

@Mike D. i prefer a mix  of 1 and 2br.  its been my experience that ppl stay longer in 2bd vs 1 bd or studios.  my 1bd/studio have more turn over.

in terms of unit mix, generally, i look for 2/3's 2br and 1/3 1br.  i don't have any 3br, but wish i did because some of my families want to move up in space and would like to stay with me. 

@Manch Hon lindahl covers the basics of MF investing in his bootcamps.  he has a strong focus on market cycles and talks about buying in the low part of the cycle, selling at the high part, etc.  for me, it was common sense stuff ;-)  his formula: look for properties with a problem, buy at a discount b/c of the problem, fix the problem, sell for more.

 he covered the following topics in the boot camp:

1) how apartments will make you wealthy ... overview and mindset stuff

2) how to find deals (he brought in a guru to up-sell profit grabber)

3) the quick and easy way to evaluate properties (i think he now sells a subscription for an analyzer tool)

4) how to determine where and when to buy

5) the buying process (0 money down ... up-sells another syndication bootcamp)

6) negotiation

7) how to write offers 

8) how to protect what you have - buying properties in the right entities

9) property management overview (he up-sells another 3 day managing the manager bootcamp)

10) overview on 1031 exchanges

11) tips on how to increase your sales price (i.e., increasing NOI)

12) ends with an up-sell to his coaching, which i think starts at 5k, + a monthly fee.  

i did walk away with a lot of good knowledge ... but theres a bit too much hype in the boot camps for me (as measured by getting 25% of the room to rush to the back to sign up for the next bootcamp or another guru's product) he IS a good pitchman and IMHO sells hope as much as information. 

dave built his business from nothing and knows the apartment business ... he is also an entrepreneur and makes no excuse for charging a premium of his materials. 

you could learn what he teaches on BP, but the reality is it would take longer, you would have to invest more time, and learning on a forum is a meandering process.  the boot camp condenses months of meandering into a few days...but so does his books.     

Manch, i'd be happy to connect some time if you're interested talking about MF, its a passion of mine ... i've been at it for 10 years, have a pretty deep understanding with commercial, have been a partner in projects as big as 465 units, have syndicated, and can speak to owning/managing smaller 10-20 unit MF buildings.  also, i'll be at @Johnson H. meet up in SJ on the 15th, maybe we could connect there. 

Hi Trent Pulido welcome to BP! I invest in Commercial and own a few MF properties on Oahu. I'd be happy to chat with you about the Oahu market. PM me to set up some time to talk.