All Forum Posts by: Greg Kasmer

@Ram Gonzales - Best of luck! I think if you understand the price per unit as well as the price per square foot in the zip code and nearby zip codes that will give you a good idea of the comparable market analysis approach and appraiser might use. I've also asked real estate agents for their opinion as well. 

@Jaime Ponce - There are hundreds (maybe more) of ways to invest in real estate. My suggestion would be to start talking to 5-10 people in each segment of real estate and ask them a similar set of questions. (i.e. What do you like about your niche of real estate? What don't you like? What are opportunities that you see? If you had to start again, what would you do?) I think if you ask those same questions to 5-10 house flippers, single family investors, STR investors, multifamily investors, wholesalers, etc... you'll get a good flavor for the good, the bad, and the ugly in each segment of real estate. You'll then get an idea of what sparks your interest. I would like your interest drive your focus. Good Luck!

@Jack Hamm - There are many ways you could try to find wholesalers in your area. Some of them that come to mind for me are:

- Post in craigslist that you're looking for bird dogs for real estate.

- Ask other investors that are part of your local REIA.

- Keep an eye out for "We Buy Houses" signs in the area and call them. 

- Reach out to New Western (large wholesaler) in the Philadelphia Market and see if they operate in Delaware.

- If you have any relationship/contacts with contractors in your area, let them know you're looking for wholesalers and/or homes to buy. 

Good Luck!

@Ram Gonzales - I bought a quad earlier this year and in addition to running the numbers as a larger multifamily property (income, expenses, NOI) I would also encourage you to look at the price/unit for triplexs and quads in the area to get a general sense of a comparative market approach. The price/unit in the area will likely be reviewed/analyzed by an appraiser and in fact, could be the main driver of their valuation of the building. It might also give you some insights into why the list price may be what it is... For example, if most quads in the area sold between $600-$650k, then their asking price may not be crazy. However, if most quads sold for ~$500k or so, you know they're likely way off and your offer of $450k might actually be intriguing/interesting.

On another note, if your rent increase estimates are accurate, you'll bring in about $10,200 more on an annual basis (assuming you achieve the $1200 and $1350 rents) so putting in $50k in renovation just passing my gut check of getting about a 20% yield on renovation costs - not great, but not bad either. 

Good Luck!

@Suhaib - For me, the biggest driver is the ability to increase rents for a particular building/property and then investigating what it would take to get the rents to that level. (i.e. renovations). This can be done for a specific property by researching competitors and using some software to identify rental rates of nearby properties. (e.g. rentometer). What would be interesting to me if a software/program could do this analysis at a larger scale in order to identify off-market properties that have "below market" rents that would help prioritize someone's off-market focus. For example, is there a way to analyze the rent rates for a particular county and identify the subset of buildings (maybe less than 20%) that have below market rents? Then, one could target that subset and reach out to owners knowing that there is "upside" in revenue. There are larger databases (Co-Star) that have information on larger properties, but I'm personally interested in small to mid-sized multifamily.  Not sure if something is out there in that respect, but I'd be curious to know!

@Jerell Edmonds - Would you girlfriend be buying the multi or you? Sounds like she would be buying in her name, but you would co-sign? I bought a multifamily property that was undervalued, so working on renovations and improvements now. My goal would be to get a new loan early next year and pull out some of the cash in order to go find my next multiunit. Good Luck!

@Brandon Ja - The standard answer here is to check with your CPA, but from my standpoint expenses that add longevity and functionality to an existing property (including adding square footage) would make that a capital expenditure that can be depreciated over time. This would also increase your cost basis of the property whenever you eventually sell. To me, this is CapEx, but double check with your CPA. Good Luck!

@Yixiong Pan - If others have the cash to put into deals it sounds like you could form a JV partnership with others where they bring capital and you operate the deal and come up with a split of equity of the purchase. If you have questions about the ability to obtain loans, you'll want to make sure whomever you partner is very "lendable" with banks. I agree with River that DSCR loans are a good option. The other option I would consider is regional credit unions that hold onto mortgages/loans and don't sell them to the secondary market - they are "portfolio lenders" and have the ability to be more flexible with their terms. Good Luck!

@Jordan Townes - Looks like the bank is denying the HELOC because they know that taxes are likely ahead of them and the HELOC would be in second position to the taxes. Would you be able to get a mortgage on the duplex at perhaps a lower LTV amount and have them either escrow the taxes or use the funding to pay the tax balance in full and use the remaining funds for the renovation? I would try a loan or mortgage route on the SF and see what they say. Good Luck!

@Brian Scott - If you're targeting buying your next MF by yourself (without partners) then as others have said you'll need your own capital. The only other idea I can think of is whether you have equity in your own home that you can tap into. A HELOC or loan on your primary could provide funding, but that is typically not designed for longer term funding - i.e. a down payment on a multifamily.... Unless you're 110% confident in the MF purchase and you can drive up the value of the building quickly (6-12 months) and then secure longer-term fixed financing to pay off the HELOC or loan.

Otherwise, I think you need to consider partnering up with others either in a JV structure or a syndication structure for your next MF purchase.

Good Luck!