All Forum Posts by: Dan Bowe

Just interested in seeing how other investors are viewing rent increases going forward.

We're mainly buying in DFW and projecting 0% growth for the next year, 1% growth for the two years after that, and 2% yearly growth after that.

I'm bidding on a 40 unit complex in the Midwest. Asking price is $2mm.

Property is on the market for a short time. Broker asked for B&F offer by tomorrow and said that he has two all-cash offers around the asking price.

The property is pretty attractive at that price point.

How can I know if broker is ********ing me? Are all-cash offers at those prices common these days?

Seeing the market in reading the big brokerages reports on the main metros I invest in, everyone estimate rent growth at 0% for at least a year or two. Expenses naturally rise with inflation - insurance, property tax, utilities...

Those two factors, by definition, result in lower NOI down the road than in-place/year 1 NOI. Meaning that even with cap rate expansion set to 0%, the sale price is lower than the going in purchase price. resulting in negative/low yields.

Am I missing something here? Do core deals not pencil in this environment at all?

Appreciate the comments. I'm trying to figure out what are the best practices in terms of buyer broker fee in commercial multifamily. Is it fee split with seller broker or the buyer pays out of pocket?

 Thanks, really wanted to understand what's the norm these days.

I'm fairly new to RE investing. I've started looking around and talked to a few brokers about deals I found online. One of the brokers said he could send me dealflow but required that I sign a non exclusive representation agreement. Is this common?

Also, the agreement specifies that if I buy a property through his service I'll be paying 3% commission in case the sellers broker doesn't split fees. Is that also normal? 

 Thanks Brook, appreciated. What would be the best way to find such partners?

Thanks Chris, appreciate your opinion. What would you say be the best way to find a such a co-gp these days?

 Thanks Andrew.

How can I realistically start with smaller residential or small multifamily commercial properties? are we talking 2-4 units? Basically because I'm foreign I don't qualify for residential mortgages and it would be much easier getting an asset-based debt.
Or do you mean buying in cheaper tertiary markets?

So a bit of professional background about me:

• Bachelors in finance, top of my class - I have deep understanding in debt, equities, cashflows, business operations etc

• Worked for a year as an acquisition analyst at small fund that invests in multifamily deals. Doing mainly $50M-$300M JVs with local PMs. I had my fare share of financial modeling and asset management and can say I know how to analyze deals and asset manage very well.
But, I was not too involved in the closing phases of the deals (lawyers, reports, debt placement, contract negotiations, parts of the DD...) so I lack knowledge in those parts, which I make up for in reading ton of materials and listening to podcasts.

• After that I worked for three years as a management consultant at McKinsey where I sharpened my business acumen, problem-solving, storytelling, and presentation skills. And also engaged with institutional investors on a regular basis.

I'm highly entrepreneurial and figured out that what I really want to do in my professional career is US multifamily investments.

What I've done so far is selecting the markets I'm interested in (in TX), building a comprehensive financial model to analyze deals, and creating a very detailed due diligence list. I also have an investment strategy in place (core/core+ investments, minimal to no rehab, aiming for 8%-12% IRR over a long holding period).
I even have some friends and family that want to invest with me. Together with my personal funds I can pull around $600K of equity for the first deal.

The thing is, I was never involved in the entire closing process on a property, from A-Z, myself. Not even on a SFH. I feel like I don't know what I don't know, and I feel that jumping straight to an investor-backed leveraged multifamily deal as a first timer might be a bit too much.
Yet, I see no other way to enter the multifamily space as the entrance barrier is high, and cheaper deals in tertiary markets are often cheap for a reason.

Would love to hear your thoughts on whether jumping straight to a multifamily syndication is reasonable, and if so, what would be the best path for me  to make a deal happen in the coming months?

P.S, I'm not a US citizen/resident, don't have a credit score, and plan to manage my operations remotely if that matters.