All Forum Posts by: David C.

 Percy, thanks for your response - very good points.  Congratulations on the 1000+ units.  That is fantastic!  

You hit the nail on the head as to why I posted this question.  If I could get into a real estate situation where I could hire a property manager(or have 3 levels of insulation) and still cash flow well, this would not be an issue.  

However, for those who have smaller multifamily properties and have to handle these issues themselves, does it really make sense to do this when cash flow is minimal?  It is a curious question, in my mind.

@Michael Plante

Nope.  Not true - They call landlords about noise, fights and lots of other things.  I have spoken to landlords and property managers of multifamily units, and they do call them (that doesn't mean that they don't also call the police).

Just because they may not have called you, doesn't mean that they have not called other landlords.  This is what I meant about "one person's experience does not a rule make".

That being said - This is starting to veer off of the main topic:  Cashflow amount vs. "headaches" of ownership.

@Wes Short

As you know, I am new to the MF sector.  However, many of the same criterion I use for a residential broker is applicable to a multifamily broker.  

I look for someone who is quick to respond, easily accessible and has an excellent understanding of what we are looking for (I make it a point to provide them specific criterion - class/neighborhood, price point, condition, etc).  

An investor needs to feel as though their agent/broker is invested in them and that they maintain ongoing contact. Having to chase down a broker to look at an MLS that you have found yourself(which matches the criterion you have already discussed with them), does not inspire confidence. If a broker has access to off-market properties as well, so much the better.

As for multifamily, I look at it as "Residential broker plus".  By this, I mean that I look for the same attributes as I do with a residential broker, but with more data to provide.  Having a broker that is able to provide proformas, rent rolls, property history and need for updates(i.e. they know the ages of the roof, major renovations made or required, etc.), rather than having to "check into that" when they present a deal.  In short, a confident, knowledgeable, prepared multifamily broker.
 

That is very good advice.  I love the "super power" concept.  Yes, I have a skill set that I have and have offered to those whom I come across.  However I find that those individuals/groups that I have encountered have a "team already in place".  It's kind of like trying to gain admittance to an exclusive club.  That is where I think these paid coaches/gurus really cash in because they profit on the opportunity to gain access to others in a "pay to play" business concept.  These are typically BIG $$$ to gain entry, which I am hesitant to do (I'd rather save $40k and put that capital towards my next purchase).

That being said, I absolutely understand that it would be folly to just bring someone aboard without having an established relationship of trust and a good working knowledge on a personal level.  However, entering that inner sanctum is quite difficult.

@Sylvia B. and @Michael Plante

We have never received a 3AM call on any of our SFHs.  Our properties are in A neighborhoods, since you asked.  

But I have read posts of others who reported with MFHs stating "more tenants under one roof tends to spawn more issues" where they have described issues occurring in the middle of the night.  Essentially, one person's experience does not a rule make.  These days, I don't discount any potential tenant issue.

I would also note that you should not get a call from a SFH owner complaining that the tenant on the other side of the wall/ceiling is causing a disturbance, making a mess, or having a domestic dispute if you are renting to a single person.

Once you get more than one tenant/family under a single roof, this now comes into play.  That was my point.

Hey folks,

The more deals that come across my desk for multifamily units, the more I ask myself this question:  How much cashflow per door for a multifamily property makes sense for me to manage a small multifamily building?  

Intuitively, the larger the complex, the better - provided you have cash flow.  But then the more tenants, the more headaches, right?  So would it really make sense to invest in a 10 unit complex making $100/per door cashflow a month ($1000 total per month, $12k a year), but you have to contend with 10 tenants?  Does $12k/year really get you out of bed at 3AM to deal with complaints/problems, verses two or three SFHs that might produce the same ?

So what is your number? What are your thoughts?

@Chris Collins That is good advice. I do not mean to sound smug, but this is definitely not my first rodeo (I bought and sold *many* properties in the STR/SFH arena), I just haven't jumped into multiunit property.

Just as I have approached my brokers in the STR/SFH arena, I am cordial, informative and specific as to what I am looking for. I have also provided information regarding available capital for investment and have provided a lender written document outlining my availability to lending/capital. That is why I have been a bit surprised as to some of the "lukewarm" responses.

That being said, as you eluded to in your post - this experience may be due to the nationwide lack of inventory (and perhaps that the government printed so much money it is everywhere now).  Perhaps this shifted the paradigm to "You need me more than I need you" ?

@Charles Seaman 2-50 units.  Of course, syndicators are always happy to get a cold call from hot cash.  :)

Fellow BP-ers,

I have a good network of single family home brokers and am currently assembling a group of multifamily brokers to work with in my area.  I have found that the multifamily brokers that I have come across have been very much "hit or miss".  

Some are very interested, attentive and seem invested in clients, while others seem to take their time, don't respond and/or let you sit for days without contact.  Are multifamily brokers less motivated or not interested in taking on more business, or are they just a different breed?  

My SFH network is very motivated and attentive, while some of the multifamily brokers seem as though potential clients could walk away, and they wouldn't care (and should walk, I suppose). Anyone else have this experience?

BP Family,

When I have read stories posted on BP regarding individuals who have successfully navigated and closed multifamily deals, I have noticed a recurring commonality:  Success favors those who have an experienced partner/mentor in the multifamily sector.  Clearly, this makes sense.  

My father used to refer to this as "finding a Godfather" - Someone who is willing to take you under their wing and help guide you along the way towards greater success.  Someone who will be "in your corner" when you need them.  

So for those who found their Real Estate "Godfather/Godmother", how did your paths cross ?

Dave

P.S.  Feel free to DM me as well - I would appreciate any insight/knowledge that you are willing offer as I try to find my own "Godfather/Godmother".

@Mike Hoffman Congratulations!  That sounds like quite an undertaking and strokes of good luck and bad, along with tough circumstances that you adapted to.  Well done!  @Don Spafford you are absolutely correct - having an experienced partner makes a big difference.  Finding that person is a task all in itself.