All Forum Posts by: Giovanni Isaksen

@Simon Lloyd Haha, maybe WB isn't trolling for JV deals on BP but @Steve F. could hang out at Piccolo's and pitch Warren when he comes in for prime rib. ;)

I have found joining the local apartment owners or landlords association provides great networking opportunities, including finding the who's who of local service providers. Check out Metropolitan Omaha Property Owners Association or MOPOA: http://www.mopoa.com/

Good hunting-

For the multifamily in PHX, one of our clients has been using MEB with good results: http://www.mebapts.com/

Ken McElroy's outfit is pretty good too for larger multifamily: http://mccompanies.com/property-management.html

Good hunting-

@Ron Steele for apartments many lenders require a minimum of $250 per unit per year for capital replacements, things like roofs, parking lots, etc. If you add in upgrades to keep the property competitive over time with things like landscaping, kitchens and baths, etc. the number can get up to 450 or higher. Also if the property is older, masonry construction, central heating and/or hot water it can go higher too.

This will vary depending on the market and the property of course and whether you're trying to show numbers to your lender or you really want to cover expected future costs. Often times the local landlord or property owners association will have data on it. The best way is to have a Physical Needs Assessment or Property Condition Report done with estimated life and replacement costs for the major systems then build an item by item budget for each.

Good hunting-

One of our clients also owns a number of MHPs around the country. I remember him telling me that one issue to pay close attention to was the size of the spaces and the access. Older parks often only have room for the older, smaller homes and can't accept larger modern homes. I don't remember the numbers off hand but even if an older park had large enough spaces the streets may not have enough room to maneuver new homes into place. I do remember him also saying that parks with older single-wides end up with a lot of abandoned homes because they cost more to move than they are worth. As @Joel Owens said you can rent them out but they're the MHP equivalent of a hotel with hourly rates.

Good hunting-

I think there are three main factors to analyze. The first is financial of course, which nets you more profit? Selling the building generates one large payment but could take longer to sell. Selling the units may net you more but come in smaller amounts, meanwhile you're still carrying the building and dealing with a much larger number of transactions.

Which is the second factor. Selling the building would be a commercial transaction and would involve dealing with a more sophisticated (businesslike) buyer, in theory at least. Selling the units means dealing with multiple resi buyers (and their agents) whose buying process is much more emotionally driven and less defined. Much more transactional 'brain damage' that way.

The third factor is legal risk. If the property is in a litigious pro-buyer condo market (CA for instance) it would be more likely that post sale legal complications would come up selling the units to retail buyers than with a commercial sale.

I would recommend researching both alternatives by finding the top two or three commercial brokers for that size property in the market and using their input develop a market price and timeline to sale that factors in all the out of pocket costs of marketing and selling the building. Then I would do the same with the top condo agents for selling the units.

If selling the building pencils out proceed to sale. If selling the units looked more rewarding I would review the litigation risks with your real estate attorney to understand what your exposure would be before listing the units.

Good hunting-

@Ming Lim I think the reason everyone's been so quiet is because they're all busy, at least for myself. Deal flow has been ramping and we've been passing on a lot of smaller multifamily deals (<60 units) that don't fit. If you and @Ram Srinivasan are looking for small multifamily deals in the Western US let me know what you need and I'll shoot you anything I find that fits.

Good hunting-

Thanks @Jean Bolger for your kind words. BP is a great opportunity to share and learn with people who not only get it but have been there, done that and are still doing it. Thanks @Brandon Turner and @Joshua Dorkin for making the whole thing happen.

So many other people to thank for sharing their experience and accumulated wisdom. I want to specifically mention @Bill Gulley but there are dozens more with institutional experience that help us learn what the 'big guys' are doing and that is powerful.

There's nothing new in the world but the history you don't know said Harry Truman and the depth of knowledge here on BP would take many lifetimes to acquire on our own.

Backing up what @Chris Winterhalter said, lenders have told me there's too much 'brain damage' to do a 223(f) loan for under 5M, they just don't make enough on them.

For properties over 5M the refi route can work however. One of our clients was buying Dallas REO product in 09/10 with 2 year private money, turning the properties around in 120 to 180 days and starting the 223(f) refi process as soon as possible.

They're a lot of work for everyone involved but a non-recourse loan with a 35 year am and fixed rate is pretty sweet if you're planning to hold long term.

@Elizabeth Colegrove those sound like great places to 'have' to go to.

The math and the logistics of managing apartments are very different than an sfr though. @Shaun Anderson the OP was specifically asking about small apartment buildings and they typically are much more management (or landlord) intense.

I almost fell out of my chair when @Lynn McGeein said she only visits her property once every year and a half, then I realized she was talking about a house. For our asset management clients either we or they walk the property every quarter with the property management team.