All Forum Posts by: Derek Caffe

Hello BP Members,

Can anyone explain how the rehab costs differ for small multifamily properties versus single family homes (SFH)? I purchased the BP Book on Estimating Rehab Cost, but considering it's focused on SFH, I'm curious how I should adjust potential rehab costs.

I currently own a duplex, but now looking at a triplex that needs renovations.  Are the costs simply three times the SFH costs for the same square footage? Are they typically a percentage more? Is there a rule I could use to estimate (1% rule, 50% rule)? Is it just a measure of square footage?

I'm in the Atlanta metro, but would love to hear the various ways other multifamily investors consider rehab costs. Thank you.

Plus, I guess I should mention, there is a lot of deferred maintenance.

@Tom Shepard thanks for the great response! Bringing me back to the basics of coming up with a starting point. Huge help!

@Joel Owens, I was waiting to hear your thoughts on this. I understand your thoughts on the smaller complexes and I'll be moving into the apartment community ranks soon enough. I'm just taking my time and learning the ropes bit by bit. So you would recommend, perhaps a master lease option?

And that @Gilbert Dominguez was the type of advice I was looking for. Thank you very much sir.

@Gilbert Dominguez, @Bryan H. I'm definitely looking to put in my due diligence on the property and find out rent rolls, maintenance records, etc. I'm more concerned with how to approach this considering it's more of a family business where I'm certain to see little to no maintenance records, financial statements and less professionalism (more emotional) when compared to owners of larger apartment complexes. 

I'm really seeking advice on how to proceed under those conditions. I purchased rental property before (though this would be on much larger scale) so I'm familiar with the due diligence. It's more dealing with mixing soft skills (people management) with hard skills (deal/ financial management) right now while moving through the negotiation process considering I'm a newbie at apartment investing.

Hey Philip, great advice, as of yet, they haven't put out an asking price. They're simply looking for an offer from me. I'm not looking to throw out a random number so I'm looking to get them to talk some more to really get a good idea of all the options on the table to get this deal done. 

Seller financing may be a great option, but at this point my knowledge is limited. All I know at this point is that it's in a great location and the sellers are motivated.

I've come across an off market 30+ unit apartment complex. My question is how should I approach negotiations when I'm speaking with the family directly? The details are outlined below.

It is currently owned by a group of family members who purchased it from their relatives in order to keep it in family. The new owners all have full time jobs and not really looking to be landlords. 

I just received an email from the head of the family group spelling out the situation and asking although they did not do an appraisal, because it was between family, what would I offer them for it. 

I've only been able to ride through the property at this point. I don't know rent roll, unit mix, market cap rates, etc. 

Hello BP members. I'm a service-disabled veteran and constantly hear about all the money set aside for veteran, minority, and women owned businesses. Two of which I qualify for.

Is anyone aware of government contracting opportunities for real estate investors? Any resources? Thank you.

I've already tried to get the owner to go down to $100K, but she countered that her mortgage was $130K. I said I would pay the difference, but she stated $150K was the only amount she would take. Considering this is my first time I wanted to avoid losing $1400 on a property I wasn't going to take ownership of ($900 home inspection, $475 appraisal & $20 credit report). I guess I'll have to keep looking.

I'm a first time home buyer and investor. I was supposed to close on a quadplex in Clayton County, GA for $157,500 with VA financing this month. I'm still under the financial contigency period. The home inspection said everything was solid, but the VA appraisal came back with an appraised value of $100,000.

My question is how can I salvage this deal? And also, considering the appraisal was nearly $60K below the agreed purchase price, should I still be considering saving this deal?

The property is cashflow positive with 3 units currently rented at an under market value of $1400 total. There are (2) 2b/ 1b & (2) 1b/ 1b.  The seller will except no less than $150K for the property. I'm trying to figure out ways to make up the difference. Thanks.