All Forum Posts by: Dustin Smith

Thanks for the reply, but I don't think you're giving enough credit to finding the deal?  You don't think it's worth something to bring an investor an off market deal with significant upside potential?  The entire wholesale industry is built on that concept.  I don't expect anything big, just a small finders fee and the opportunity to be included on the project.  

I've come across a large multifamily complex in my market that is obviously mismanaged.  It's a 5 building 174 unit complex, 1978-1983 builds, physically in good shape but could use updating.  The easy opportunity is rent stabilization.  As far as I can tell, the vacancy rate is currently about 33% in a market with traditionally very low vacancy and ADVERTISED rents a minimum of $150 below market rents, no telling what the current tenants are actually paying.  Upon further research, the owner is in his 70's, has been in business for 50 years and has a pretty large and diverse portfolio, including 736 other multifamily units in eight separate complexes, a self-storage/car wash, three mobile home parks, several commercial properties, several undeveloped parcels and several single family homes.  

I believe the same opportunity exists in all of the multifamily properties, but I know the most about this complex and I don't want to put the cart before the horse.  Obviously this is a huge undertaking, something I'm nowhere near able to tackle on my own, but I want to try to put together a deal.  I would love to partner with someone and learn the ropes of value add multifamily, but I'm mostly just looking for some guidance of how to proceed professionally.  Do I find a partner/buyer beforehand to make my interest more credible and then approach the owner?  Do I approach the owner with no real credibility and see if he's willing to sell, then find a partner/buyer?  I'm probably overthinking it, but there is several million dollars at play and I don't want to blow my opportunity by being too eager and coming off as a waste of time (to a partner or the owner).  Any thoughts are thoroughly appreciated!

A big part of it is I'm not looking at turn key investments. I like value add opportunities, which usually means vacant or high vacancy. I want to know condition, layout, etc. so that I know if it's worth pursuing.

I have my team in my home area, but I travel a lot around the region and come across a lot of interesting deals. Obviously I want to get information on the property to decide if it's worth pursuing, and ideally I'd like to at least get a quick walk-through of anything vacant, but many of these deals are an hour or more from my home area. I've searched to find an answer, but I can't seem to find anything. Is it wrong for me to call the listing agent and get the info and maybe a quick walk-through?  Is there a better way to handle it?  I don't want to have to talk through a middle man just to get information. Id be interested to hear thoughts regarding residential property as well.  Thoughts are appreciated!  

Welcome from the other side of the river!  It's good to see other young FM area investors around BP.

Good morning BP!

I've been inactive for awhile, both in the real estate realm and on BP, since my first deal fell through.  I'm getting my ducks in a row again to get going, but I've run into what may be considered analysis paralysis, but it's more focused on the difference between general rules of thumb and actual analysis when deciding how much to pay for a property.  At what point do rules of thumb become irrelevant and when is it appropriate to actually start asking for real figures when making an offer? 

For instance, I have my eye on a $115,000 triplex with some deferred maintenance that rents out for $1500 per month.  In my area, based on rules of thumb, that's a deal at 1.3% rent to cost.  But at what point do I say that $115,000 is a price I'm willing to pay, versus getting a pro forma or real numbers from the seller and digging into the numbers and finding out what the actual costs are, and ultimately how much I can pay?  Maybe I'm over thinking it, which I've been known to do, but I know my agent has better things to do than contacting every seller that has a property that meets my rules of thumb.  I'm just trying to figure out how everyone else decides what they can offer. 

Thanks!

Welcome! I'm also in the Fargo market. Glad you found BP, it will prove to be a bigger resource than you can imagine. Would love to get together some time!

@kyle davis I live in Casselton but I consider Fargo home, and grew up near Staples. Fargo is a great market if you're in it for the long haul. "Good" deals are hard to come by, but it's a consistent market. By consistent I mean stable growth and relatively minor market swings. I'd love to chat about it sometime if you're looking for some insight. 

@Derek Dame small world

@Derek Dame I was roommates in college with Brenyn Hardy. I think he lives in Cavalier now.