All Forum Posts by: Bruce Lynn

Great story.  That area can be pretty tough with tenants.  Schools are not great.

I would not consider that area anywhere close to AT&T stadium, but maybe closer than CA.  It's about 20 miles away in an entirely different sub-market.

Great price range though.  Will be interesting to see if you can get rent bump in that area.  

Of course we wish you the very best of success with this investment.

Congratulations..... It's a great time to get started.   Don't forget about single family as well as to cut out 80% of the deals.   MF even on duplexes is often way overpriced.  I have seen a few deals lately on MF but plenty of it makes no sense on pricing to many investors.  Just depends on what your goals are though.   Also seems like a lot of MF sells occupied with tenants in place so you just have to comfortable with that and contracting up from and seeing inside after contracting.    

1st step is to find a great lender and get pre-approved for a loan so you know what your budget is.  Also deciding if you want one that needs work or is fixed already.

Co-living will be necessary due to housing cost.  I think we will see more "adult" families living together...kids move back in or parents move in with kids.

The traditional apartment model was based on 12month leases, but jobs are not always 12 months and people want flexible terms, so co-living often offers that.

Seems like younger people between 20-30 and some other age groups don't want to get married and start that housing pathway our parents and grandparents took.   They change jobs more frequently so renting a room works better for their lifestyles.  People like trying different cities now and like to test if they like it.

So many reasons people will probably do more of this in the future.

Because the strategies of 10 years ago no longer exist?

Because they buy into the dream the guru promotes?

That's a good headline.  Not sure if there is more to the story or not.

Are there still a lot of vacant houses?  How is population and job growth?

How about the income growth?

In every city there is a limit to prices, based on income.

Padsplit seems like a neat idea to me, but seems expensive. Is it something you could do on your own? There are Ft. Worth duplexes on padsplit? Maybe call those owners and see if they've had any issues? While I can imagine some cities might be against "boarding houses" or enforce their "brothel law" I can't imagine too many cities would be supportive of it. Times are changing somewhat though, so maybe over time if they are not supportive now, they will be at some point in the future. Think ADU law changes in CA, and in Austin and other cities. Some cities are waking up to housing crisis and affordability crisis, so may change their attitude.

Get the house hack under contract and closed first.  Don't change jobs or income yet.

Once you do and you think you can manage the payments based on your new income, maybe once you get the rooms rented.

Then if you want to switch there are plenty of opportunities.  Maintenance at at PM company or one of the big hedge owners like AH4R, leasing at apartment complex will teach you a lot about applications, fraud, leases, collections, evictions.  Maybe go to one in a tough neighborhood so you really get in the thick of things.  You could go to work for a remodeler too perhaps giving bids, selling service or see if they will train you to be on a crew.

You could also go to work as an ISA for one of the big wholesalers.  That means 500 calls a day finding motivated discount sellers.

Probably other positions too, but that's a start.

Are you getting any good finds on the house hack?  4-5-6 bedroom homes with 3+ baths.  That seems to be what works best.

Well not sure what you're thinking about with automation?

If you're thinking input into Excel or Sheets, then yes...I would expect everyone does this today.

If you're thinking you type in "Riverside  Apartments" value on ChatGPT, I don't know that that ever works.  Not all data is public?  For example how many units in your comparable are classic vs Platinum.  Do they have stainless or white appliances.  Are all the AC units new/er or are they all on their last leg.  What is unit mix of 1/2/3 bedrooms?  Is it class A/B/C, B+ or B-?  Does it have carports?  If so are they charging rent for those?  Do you have inhouse construction department to reno units, or are you hiring outside contractors?  What new apartments are permitted around it...or 1/2 way thru construction, but not on the market.

How do you become an expert or master it.....probably like any other skill...practice.  Wasn't there a book something about 10,000hrs of practice or maybe it was a chapter in a book.  I would say that is about right.

And in the end, as @Arn Cenedella wrote, it is as much art as science...so even the best killer spreadsheet only takes you so far.  Your competition will probably use better or worse assumptions.  Interest rates and cap rates change, competition changes, your PM ends up being horrible, lots of variables.

Just to throw you a monkey wrench, in your killer spreadsheet does it include the credit score, income, and employer of every resident?  How about that of your competitors?   What if it is 90% occupied with employees of one company.   Everything looks great and a year later that employer goes out of business or lays everyone off?  Would people say your underwriting was good or bad?

Will interest rates go up or down when Freddie/Fanny are 100% privatized?   Looks like DOGE is ready to cut them loose.

5unit is probably manageable.  20 unit is work I would think.  Too small to have any onsite staff probably.  So no leasing agent, no maintenance.  You either end up doing it all yourself or need someone on your team that can do it.  If you're not handy, you get handy real fast.  Then again no one gets into commercial dreaming of being a handyman.  Plenty of people do have 10-20 unit and work thru it, you just need to think it thru and have a plan if you don't want to do all the work.  If you have 10% vacancy that means every month your have 2 units that need make ready and rented.  Another thing to think about is what kind of turnover you have, what condition the building is in.  Do you have central boiler for water and heat or individual units? If central then if it goes out or has issues, you have 20 people calling and mad....and you're the GUY.