All Forum Posts by: Joseph Gozlan

@Joshua Pfaff Welcome to BP.

There is a lot of great information spread across the community forums, just about anything you need to know is here. Just search.

The first thing I think you should do is educate yourself on multifamily in general. Managing and especially financing multifamily properties is nothing like residential properties.

Next steps (not complete, just very high level)

• You need to do a full underwriting of the deal
  
  • REALLY CRITICAL! Do your homework.
• Submit an LOI
• Negotiate a contract
• Due Diligence period 
  • Property inspection
  • Identify PM or build a plan to do it yourself
  • Build CapEx & renovation plan as needed
  • Secure financing
• Closing
• Transition

@Marc C. if you are in negotiations you should have gotten the property financials by now. 

Take a look at what the current owner is paying and adjust it to what you will need to pay based on the price increase from the current tax value to your purchase price (percentage). 

Another option is if you have a PM selected already, they can get you a really good ballpark number to work with.

Hi @Jeff Helm

I went through the same journey so I can relate :-)

Here are a few short answers:

1) Yes. If you are the sole/lead investor the banks will look at your personal financial strength and it doesn't matter if you buy a duplex or 200 units. The smaller the deal the more interest they will have in your personal financial strength and the higher the chances they will ask you to be a guarantor on a recourse type loan. Somewhat counter intuitive, I know.

2) 20%-30% is the "norm" but it can go anywhere depending on how creative you can get with the financing.

3) Yo didn't describe what kind of properties you are going for. There is a HUGE difference if you are trying to buy a 1-4, a 30 units building or a 500 units apartments complex...

You can also find some great commercial and private lenders right here in BP.

@Mark Vitek I'd love to hear  more about this opportunity.

Please see PM.

when the numbers work. 

Real estate is not a seasonal fruit. Whenever you find a property that the numbers work on, buy it. Don't hold on for some magics, time of the year when all the desperate buyers come out to the fields of the MLS. There is no such time :-)

Regardless, in the summer many people move because of the kids summer break which in turn means there are more buyers (= competition) in the market. But then again, most of these people are also selling (= opportunity).

Insurance companies have home owners policies and landlord policies and the house hacking situation you mention could fall into one of those depending in state regulations and company guidelines.

Check with a local independent insurance broker because the can shop around for you with multiple companies.

While at it, ask them to quote you an umbrella policy  you'd be surprised how cheap it is.

Best thing I can wish you is to never need this services :-)

I'd ask my self what is the goal. 

Apartment building go from A class in wonderful areas to D class in what we call "war zones". The cap rates and COCR will be higher in the D class but so will the risk and headache.

EVERY investment has a risk-reward ratio and it's your personal tolerance that determines if the deal is good FOR YOU.

In general, the A class are considers more of a wealth preservation than wealth building kind of investments. 

Personally, I like the C/B class properties. 

thanks for sharing @Taylor L.

Rod kahlief had a great podcast recently with a syndication lawyer. Good stuff there. 

I'm from the DFW area, if I can be of any help, please let me know. 

@Christopher Telles @Heather Boren @Joel Owens thanks for sharing your honest view of things. 

Others could have sugarcoated the situation and I appreciate people like you that call it as it is. 

@Simon Ghandil just because the life of a full time CRE isn't for you doesn't mean you need to give up all the benefits.

If you wholesale deals and come across a commercial deal opportunity you can reach out to a commercial agent and get a referral fee (if you're licensed or it's allowed in your state) or at least build a relationship with the broker for a time when you'd to invest in a commercial property yourself. 

Good luck. 

@George P. she wrote "buy" which makes it weird. 

The rental model is already established and I've seen it done all around. 

If anyone on the forum is doing that for investment please PM me, I'd love to learn more about the model and the margins it generates.