All Forum Posts by: David Murff

@Dave Foster @Alex Olson Thanks for the responses! So lets say I have two duplex investment properties that I plan to 1031 exchange in the future. Do I need to aquire them both under the same LLC so they can be exchanged together in one transaction? Or is that too risky from a liability standpoint for both properties to be under the same LLC?

Hey guys, I have a question regarding the 1031 exchange strategy. Been studying multifamily commercial RE and would like to start investing there. I have no track record even in SFHs or Small multifamily. Would it be possible to buy a duplex/tri/quad as an investment property rent it out and in a years time 1031 into a small to medium (5-20 unit) multifamily property? 

1. Am I allowed make the exchange from duplex to say a 12-unit multifamily property?

2. If I were to aquire multiple properties could I then bundle a small portfolio of duplex/triplex/quad into one 1031 exchange to maximize capital and therefore aquire a larger exchange property? 

3. What hurdles might I anticipate when seeking commercial financing on a larger 1031 exchange with only smaller residential lending/properties experience?

Thanks for your time guys and enjoy the Super Bowl! 

David

Hey everyone I appreciate your time and answers!

My question: 

I’m planning to go with a value add approach to 5-12 unit apartments in Kansas City area. Through my research I’ve found traditional bank financing may be the route to take as they have better structure for exits(less yield maintenance concerns) and loans include funds for improvement. I own a home(my home) but am concerned I may not have the net worth to secure a commercial bank loan. 

Would it be a good strategy to acquire a smaller residential property/properties to pad my net worth so to speak? Considering commercial lenders do not look at DTI would a residential portfolio help me secure financing from a traditional bank lender?

(Not interested in Fanny/Freddy as I don’t currently have a KP/would not meet Net worth or Liquidity requirements, I have no track record, would prefer to have improvement funds included, and plan to stay under 1MM for first property.)
 

 Yes, you are probably right. I’m doing my best to look at this from a numbers perspective and not get in love with the property. So if they slam the door in my face or hang up I’ll just take the experience from this into the next. There are millions of deals out there. Just have to find one. This would be my first property so I have a lot to learn I’m sure. Just trying to make connections and get help where I need it. Thanks for your time sir. 

Yeah, that’s what I was thinking and probably good advice. I found the owners name/address off the County appraiser property search. Haven’t been able to find a phone number yet. However, they live on-site and currently do have a property management company in place. I called the PM company regarding the leasing of that property and was informed it is 100% occupied.

Seeing that the owners are living on-site and have a PM company, I’m surprised they have let it fall into such disrepair. It all has a very mom and pop feel. Its this reason I’m wondering if I should initially reach out myself rather than through an agent. It’s likely they have been spammed, to your point, by agents. So possibly reaching out initially on my own might build better rapport?

Is this a strategy you’ve encountered or used in the past?

Hey guys, it’s the newbie again. 

So I found a property I think has huge potential in KC area. It’s an 8-unit garden style apartment building. The current owners bought it in 2015 and it looks like a true C in a B class neighborhood. Great highway access, close to plaza/downtown/ class A businesses close by. 

It’s off market and haven’t reached out to owners yet. Property definitely has below market rents, it’s 100% occupied and owner lives on-site. Building needs a lot of love. I’ve identified two comps with almost identical floor plans right around the corner. 

Questions are:

1. How should I approach the seller(direct mail or hire agent)?

**Hoping to get creative on the deal or get some credits at closing as I imagine there is quite a bit of deferred maintenance.

2. How accurate is the county appraiser’s income valuation report?

I’ve dug and found the county appraisers income valuation report

Info includes:

Sqft 

Rent collected per unit

Unit type

Building age/type/class

Gross Scheduled Income

Vacancy/credit loss

Estimated expenses 

Cap rate they used

Income value(PV)

The most important question I feel is whether this information is accurate way to gauge the property before I approach the seller. It seems a lot of information is missing as the expenses equate to 28% of the EGI. 

I appreciate any advice and thanks again guys!

My wife and I will be attending. Thanks for the heads up! 

Anything come from this? I would love to meet/talk KC with anyone interested/currently investing locally.

Thank you all for the quick and thoughtful advice. I’m very excited to be a part of this network. 

David 

Hi guys!

First time posting here and had a question. I've been studying CRE investing for a few months now. Read a lot/consumed tons of content and really excited to begin underwriting deals and making valuable connections that will build the foundation of my "team"

Which brings me to my question:

Once I’ve found a valuable deal source, how do I practice underwriting tons deals(as Brandon advocates) without wasting a broker/realtor’s time and alienating them? Considering it’s unlikely I will be confident/proficient enough to follow through any time  soon. 

Thanks!

-David 

Kansas City, MO

Side note: would love to hear from any local newbies/investors/brokers in the Greater Kansas City Area!