All Forum Posts by: Guy Azta

@Syed Z. - SFRs are pretty easy because you're really only dealing with one tenant. Yes there are repairs from time to time, but it's just one tenant. Now at least in my experience the type of SFR tenants tend to be very stable, pay rent on time and if you treat them well, could stay for a long period. They also tend to cause less problems. Of course there are always exceptions. With MFR there's always something going on. There are always complaints, problems and repairs. The more unit - the worse. Also, the tenants tend to drop out. Some stop paying. Some just jump ship and disappear. Some cause real damages to the units. Essentially you're dealing with a very different human element. Of curse if you have a really nice MFR in a really nice area it would be a very different story. Or if you have a crappy SFR in a crapy area. In such case, it's better to go for the MFR. But now you're dealing with most likely a low cap rate situation, which is ok if you're well capitalized and can be ok with low returns, but I would venture out to say that majority of people on BP are not sitting on millions of dollars just waiting to be deployed. I suggest you talk with many people who own MFRs. Some will have a very positive picture to tell and some may not. Not everyone is upfront. I will tell you right now that I have a 12 unit building I've owned for 2 years and it's yet to be profitable. I also have a triplex that due to damages done by a tenant and another one moving out at the same time, is not going to be profitable until March or April. I also have a 4-plex that because couple of move-outs and AC unit going bust, it wasn't profitable as well for couple of months. So yeah, when they're profitable, they're great. But when they don't - it's going to hurt. On the flip side, most of my SFRs are typically profitable each month.

Seems like people already went over the important stuff, esp @Nicholas Ameluxen. He's 100% right - employment growth and some say family formation even more important than general population growth and then it gets deeper from there. So I only know about Florida and other markets I invest in. Florida got very expensive. It has high population growth in many markets. Now - you want to beware of some markets that are agriculture-heavy. I don't know how strong they would remain. In my opinion if you have $1 mil to work with you should be able to get into high quality situation. If I misread and you're looking for a $1 mil property, then you should still have good options. In my humble opinion certain markets in Florida will continue to be a strong market. I would highly recommend you read a book called Big Shifts Ahead - excellent read on demographic changes in the US

Syed - I did one 1031 deal from an SFR to MFR. It worked fine, but it's really not a great process. it can be very stressful because of the time limitation. If you're trying to sell 3 SFRs, this would add another layer of complexity. I also used Exeter (saw someone else recommended them) and they were always helpful and ready to answer all of my questions. You'll get the best answers directly from the QIs. I've heard some people saying they wold rather just sell, not deal with the stress and just pay the taxes. There's nothing wrong with structuring 1031 and trying it out. Worst case you'll miss the window. Saw someone referred to reverse 1031, where you buy first and then sell. It's an expensive process, so you'l need to evaluate whether it's worth your while. At the end, the one most consistent thing I've heard listening to dozens of presentations about tax strategies is to never do anything just for the tax savings alone. On another note, MFR investing is not as easy as SFR, from my personal experience, and while MFRs stand to make more cash flow, they don't always do. Didn't seem like you have much experience with MFRs, so you want to talk to more people esp where you want to buy, and get their 2 cents.

Hi Richard - I am in the US only. I've been following the developments in Australia since I think there would eventually be a fantastic opportunity there. So I'm extremely uneducated on that market, and as others suggested, you really need to talk with locals. I would say that based on the little information I've seen, it appears that there's a massive slide that is just starting, and I myself am waiting to see how bad it will get. I have a friend who lives there and who bought a house about a year ago and he just told it's now worth 100,000 AUD less. He thinks it's a temporary slide and will recover back up within a few months, which makes me even more confident that this market is up for some really tough times. You basically have 1.5 generations of people who haven't experienced a property downturn. This is going to be interesting. 

Hello BP,

I own a small multifamily building in Cincinnati, OH. I've posted about it before. Have had many ongoing issues with the property management companies. Seems like many of them got straightened out at this point, but one problem still remains, and that is they are very expensive on the repairs side. 

I've hired some contractors independently in the past over there to do various things and while it was fairly successful, the process of finding someone good was long and arduous each time.

If anyone here knows of a good, honest and affordable contractor, with reasonable communication skills, and is open to sharing info, I would be very interested. Have 2 units to renovate. I can only offer them some work from time to time, so please do not be alarmed that I will overwhelm them with work and snag them away from you ;-) If anything they will appreciate the referral and hopefully give you a discount on your next project.

I primarily need someone for flooring, painting and installations of new fixtures in toilets and kitchens. Basic stuff.

Appreciate it and happy February!

@Joe Bourguignon I don't have the list anymore. I'd recommend this guy:

John Lewis from FFP realty

ffprealty.com

Full disclosure - I never worked with him but if I were to switch companies, I would use him

@Susan O. There's no way to know. Also, expensive has many shades. It's one thing if it simply means that your money will be yielding lower and you are ok with that versus getting into a scenario where you stand to lose money. The way I look at it now, and it's only my opinion, is that markets that have not seen high appreciation at this juncture in time, given the overall robust economy and strong appreciation in many markets, have no real reason to appreciate much moving forward, barring specific and unique local developments. For example, I'm looking at a certain market right now that given a certain development I believe will go higher, but otherwise I would ignore completely. Also, I would not conflate Columbus with Cleveland. I think these are two pretty different markets. One has been losing population in decades while the other has been gaining, among other things.

Hi @David

@David Torres

Thanks for getting back. What would be the best way to chat?

Hi @Jens Nielsen- thanks for getting back. Would love to cat. What would be the best way to go about it?

Hello BP - ABQ chapter ;-)

I'm a small real estate investor and interested in exploring the Albuquerque market a bit. Would welcome replies and intros from anyone who lives there and/or invest. Would be happy to talk to investors, agents, property managers etc. I invest in SFRs and small multi families.

Many thanks!