All Forum Posts by: Greg Kasmer

@Tyler Kesling - I would highly suggest reading Multifamily Millionaire Vol 1 & II by Brandon Turner and Brian Murray. They go through the various levels and options available in Multifamily Investing. I think if you start with them you'll have a broad swath of information to consider. I would couple that will listening to Multifamily Podcasts (I especially enjoy Accelerated Investor with Josh Cantwell and Multifamily Insignths with John Casmon)  and you'll have a great foundation!

Multifamily Millionaire Book Bundle – BiggerPockets Bookstore

@Naveen kumar Vadlamudi - Thanks for sharing the information. I think this is a great "real life" example to share and get other opinions. Some of my comments are: 

1) Do you know the current condition of the units? $75k for 14 units means about $5k per unit to bring it up to market ready rents. That seems very light to me. If it's just painting, fixtures, and some other superficial updates that could work. However, if you're talking about flooring, tile, cabinetry, electrical, plumbing, etc... that will add up quickly. 

2) Did you confirm the market rents in several ways/methods? I would use online platforms (zillow, etc..), rentometer, and calling competitive properties to "price shop". Rents are moving and I would double/triple check so you are super confident in the rates. 

3) Insurance seems low at only $3,000 per year for 14 units. Not sure of your area, but I would definitely get a quote from a broker/agent to verify. I'm seeing about $600-$1,000 per unit in my area. (PA, DE, NJ) But this is totally dependent on your location. 

4) What type of loan product are you using? I would find out their DSCR ratio and make sure you can hit their minimums either upon purchase or when they desire those ratios (maybe after stabilization in a year or so).

5) Unit Turns/ Re-Leasing. Typically I would account for the cost to turn a unit into the expense line items. For example, if you think 25% of the units will turn over in a given year you might have to paint the unit, make minor repairs, and then pay an agent to re-lease it. Re-leasing is likely a month rent, plus whatever painting/repairs you do.

Not sure if this is a "good deal" yet as it would depend on your proforma and projections after you consider the above. I would also suggest looking at the IRR of this deal as you have some moving parts on this deal (renovations, etc...) and also include your exit strategy (refinance or selling) into your modeling as well.

Good Luck!

@Joseph Scorese - What is your opinion on the relationship between cap rates and interest rates? In particular, with a stabilized, cash flowing multifamily what relationship (between the two) makes sense to the buyer and lender?

Kyle - I'm local to the Philadelphia area and would enjoy a conversation on real estate. Send me a message and we'll go from there!

@Carlos Martinez - You may also want to get another quote from a company that has a payment plan. It may make more sense to pay a bit more ($1-2k) if you're able to spread those costs over 6-12 months. Just a thought. Good Luck!

@Austin Carr - After you attend Charles's underwriting session I'm sure there would be folks in the community that would be able to provide you some feedback on your analysis. I always like looking at underwriting models and what others are looking at, so I'd be happy to review if you have any interest. Good Luck!

@Carlos Martinez - Are you able to provide a cost estimate for the roof and/or the increased cost of the premiums? If you know you need to do the roof within the next 6-10 months, I generally favor getting it done sooner than later. However, if it's only an extra $100 per month insurance savings I would not worry about it. Also, does you roofer/roofing company offer a payment plan? Maybe they could help you out by being able to pay them over time. Also, do you have any 0% interest credit card offers that could help fund/pay the roofers in the meantime? Good Luck!

@Jagan Reddy - I had this happen in one of my units in a quad recently. We sprayed the wood that was damaged with a combination of bleach and multipurpose cleaner - not sure if that got rid of it or just masked the smell enough... We then laid down LVP overtop of the hardwoods. I'm thinking/hoping that perhaps with the LVP the urine will stop on top of the flooring and the smell will be bad enough that the tenant will have to clean it up. Good Luck!

@Marvin Bracamonte - If you bought you're first multi as a house hack I've heard you have to stay in the home for a year before you can then buy your second house hack under the presumption that you'll be living in the second multi and securing a loan as an owner occupant. However, if you're question is how quickly you can buy the second without being an owner occupant loan, then you can do that right away! Best of Luck!

@Jennifer T. - I like Carini's suggestion. Tell each lender you have a term sheet from another lender and identify what you like most... I really like "X" on this offer. Can you match it? I would do that with each lender and see what they say. The one who moves/adjusts the most may be your winner! Also, is their any prepayment penalties in each option? That may be important to allow flexibility to refinance in the future.... Good Luck!