All Forum Posts by: Dallon Schultz

@Richard Hayes looks like you've received plenty of excellent advice and have already thought through multiple scenarios. You're making the right move by posting that question. It's not always easy as you make yourself more vulnerable to other people's opinions but fortunately most people within the real estate investment world want all to succeed and try to help in anyway they can. 

If there was one piece of advice I could add into the mix is to make sure you have your projected renovation costs budget up front and have that cash in hand. 

Our first purchases were 2 fourplexes and we made the mistake thinking the cash flow would renovate the units. Had we budgeted that money up front we would have increased the cashflow and value much sooner thus increasing our overall return. If possible try to save your $40k for a rainy day to protect you and your assets.

@Joshua S. I feel that Zillow should be used as a quick reference but as others have mentioned I would be slow to use their numbers in your analysis. One of the methods we have used to prove most effective in determining rent comps (market or post renovation) is to contact a property manager who is active in your space that knows the neighborhood and is already managing similar size and condition assets. Good property managers stay on top of that data and are typically able to provide more accurate rent comps for you. If you reside in a rural area this could prove to be a little more difficult. Keep networking and building relationships with people who are experts in those spaces, it'll save you a lot of time, stress and will make you more efficient in your analysis.

Register for a zoom call if you’re unable to attend or would like to tune in remotely.

https://us02web.zoom.us/meeting/register/tZlldOiorTgtHdLD7nvxz5qXnakWfWlbVoEL

Come learn about the in’s and out’s of commercial financing by our guest speaker Alex Quenzler from Northmarq. Alex has been in the commercial financing sector since 2014 and serves as Vice President/Producer in NorthMarq’s Phoenix Regional Office. We will also be discussing tips on how to raise capital from private investors.

@Dave Perlman definitely look into the neighborhood and make sure the HOA or some other governing entity doesn't have any rules or regulations regarding AirBnB's. As far as a financing stand point I'd run through some of the different scenarios you're considering to see what would be the best approach to get the most promising financing terms. If it is a secondary residence and investment property you'll most likely be expected to put at least 25% down. I reside in the Phoenix area and personally know some operators that own 100+ unit properties and will turn a few into STR to boost their NOI. I would also speak with multiple lenders familiar with that market on how the STR could benefit or hurt you if you chose to refi and take money out for another investment.

@Ayat Suleiman coming from Phoenix as a licensed real estate agent and multifamily investor. It appears that more and more people are being driven towards RE investments as they've lost confidence in the stock market. Small multiunits here will be up for 24hrs and receive multiple offers. As far as finding a GREAT deal, it's unlikely to happen right now with the spot light RE investing currently has on it. Prices per door keep increasing and people keep buying. That along with the uncertainty in the economy right now, I would imagine it would have some impact on the RE world in the near future but only time will tell. Continue networking, putting the feelers out and it wouldn't surprise me if you stumbled across an off market deal that fit your client's needs. 

@Reggie Parker there have been many excellent suggestions offered but what are you looking for in an investment? A quick return? A passive role? Active Role? Long term hold? As I'm sure you've experienced you'll receive a plethora of responses to that question, so one of the first steps is to determine what your investment goals are.

@Account Closed as people's opinions of mentors will vary and provide you maybe with a direction, I'd recommend attending multiple events to get a feel of the program and mentor that best suites your needs. This will require an investment of time and money on your part but will greatly pay off. I know you already know this but just because someone has experienced success under one mentor, doesn't mean that success will come to you. When you attend the events, interview current students, not the sales team or the host. You will find that many people in this space will be up front with you. Ask them "What are some strengths of this program?" "If there was one thing different you'd like to see, what would it be?" Every conference I've attended sponsored by different mentors has a different vibe. I think it's important to find one where not only the students have success but one that resonates with you.

@Dave Perlman I think that's a terrific way to offset the expense of owning out-of-state real estate. One thought to consider is renting out one side as a long-term rental (1 year lease) and then the side you choose to live in rent out as a short term rental or AirBNB. This would enable you to maximize the cash flow while you're not living there as long as the location supports STR. You would have the flexibility to block out the weeks or months that you're planning on being there and renting it out the rest of the time. Another consideration is doing shorter leases on the side you choose to live in. Rather than a STR approach you could always implement a 6 month lease for when you're in Maine. Just some thoughts!

@Adam Bielous no problem! We started out with 2 fourplexes ourselves and are now scaling up into the 20-50 unit space. Happy investing!

@Adam Bielous first of all congrats on catching the MF bug! I'm not familiar with the NJ market but whatever market you're getting involved in it becomes a numbers game. You mentioned two desires, cash flow and scaling. Any purchase 4 units and less would fall under residential financing so if you're looking to scale into the commercial space, getting into a property with 5+ units and gaining that experience sooner than later may help you in the future. Now if your main goal and consideration is simply cash flow than analyze both types of properties and see what produces more per month. Partnering up on smaller multifamily (5-10units) is a little less common. Not that it can't be done but you'll often find that there is not enough economies to scale and you may be better off getting into a 2-3 unit on your own. Again, what are the numbers telling you? Another thing to consider is it's much easier to force the appreciation in commercial properties (5+ units) due to the income approach having more weight in an appraisal.