All Forum Posts by: Daniel Krueger

Thanks @Yonah Weiss! The property is in our local market. A broker that I had never met before shot me an email with the deal after seeing some of our social media content. 

Investment Info:

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

Purchase price: $2,400,000
Cash invested: $1,000,000

This property was our first syndication. We raised a total of $1m which was a combination of $200,000 from myself (GP) and $800,000 from investors. This was a great value add opportunity. 1BR rents were averaging $734 but the market supports $875-$900. 2BR rents were averaging $848 but the market supports $1100-$1200. After re position we should see that value go from $2,400,000 to $3,000,000-$3,200,000. We plan to refi after re position and continue to hold for at least 5 years.

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

Huge value add opportunity in a great neighborhood

How did you finance this deal?

We used an 80% loan from the bank and raised funds from investors.

How did you add value to the deal?

We are fixing up the units and improving the tenant base.

@Tanner Marsey I don't get a return on the money I pay in rent. I'm basing my decision on whether a down payment on a house to live in or putting that money into a Multifamily property would yield more. 

Personally, I am a renter for the foreseeable future. Every financial decision for me is based on ROI. Will I make more putting a down payment on a house to live in? Or putting that same money into a large multifamily deal? The multifamily scenario always wins for me.

Started at 31. I wish I had started at 21 though. However, you can scale very quickly in this business. Even if you are 50+ you can start and do very well for yourself. 

Good quality tenants are hard to find. So, I would recommend keeping her. Offer to upgrade her unit (new appliances etc) and incrementally creep the rent up slowly. If someone gets a whole new kitchen, they probably wont mind a 10% bump in rents. Then, just increase 5-6% annually and make sure you provide her with VALUE. I am sure she knows that her rent will be higher anywhere else. So, she should be on board with slow increases. But, a good tenant at under market rent is better than sub par tenants at market rent. 

This is a relationship business. Networking is EVERYTHING! Hands down, quality networking events have the best ROI on you time. I cant emphasize this enough.

Congrats on getting $500k! I love it! 

In the Minneapolis/St. Paul market, $500k could be the down payment and rehab funds for a multifamily value add project of about 10-15 doors. I would look for things like this, assuming you have the skill set and/or the team to execute that type of deal. If you don't have one of those things, then partner with someone who does. 

Did you ask if the seller was open to seller-financing? If not, your best bet is a smaller regional bank or credit union. Preferably, one that you have an existing relationship with. The self employed piece may be an issue with some of the larger banks.  

This all depends on your personal goals. If you self manage, you are taking on a very demanding job. If you have the time (30-40 hours a week) and genuinely enjoy it, then go for it! Personally, I got into real estate to generate 'passive income'. 

So, I started a property management company that oversees all my properties. I meet with my management and maintenance team about 1-2 times per week to make sure things are getting executed effectively. I have 34 units ( between 4 apartment buildings). I self managed for a few months and spent a good 30-40 hours busting my ***. Now, I spend about 2-5 hours per week managing my managers. I personally prefer the current set up. It's scalable and allows be to use my time for networking and putting together future deals.