All Forum Posts by: Howie Baker

Thank you most kindly for the replies!  Based on the other numbers I am in agreement with you.  Another broker provided me numbers saying the same but then said he had extrapolated them out to a full year, so it has been a little confusing!

I have received an income statement on an apartment building I am looking at after requesting the trailing 12 months Income/Expense statement and rent rolls.  All they gave me was for October, 2018, but it does have a column that is described as "Year to Month End".  Since this is October does that mean this is for the last ten months only or is it for a full year from October 2017 to October 2018.  What is the most common usage as I have been told different things by the brokers I am receiving the information from.

Thanks in advance for the help!

Howie

I know CoStar offers their product to show apartment buildings, but it is very expensive! It seems several apartment owners are hidden behind LLC's or other corporate entities. Is there a good solution to finding contact info on these apartment building owners? I am happy to do the legwork, but I would appreciate knowing the best approach! Any good ideas?

Greetings B.P.,

I am making offers on 20+ unit apartment buildings in central California.  I am working as an independent contractor working alongside a real estate firm that is looking for B-C properties of the 20 unit or higher variety preferably with a value add component to the deal.  I am using their spreadsheet underwriting template and our goal is to get to an eight percent cash on cash return for our private investors who are funding the deal.  Certainly we hope as we successfully manage our properties that we will see an even better performance by these properties improving our cash on cash return for everyone.

The big challenge is as I do my underwriting I am finding that the asking prices of the buildings will return a very slim cash on cash return (some as low as 1.5-2%).  When I submit my offer that is justified by our needs of certain levels of return on our investment I am looking at offers hundreds of thousands of dollars below asking price.  I am also being told that multiple offers near asking price are being received by the seller.

My questions are:

1.  Who can buy these properties for the three to five million dollar asking prices and not see any cash on cash return?  Or in other words who am I competing against?

2.  Am I competing against all cash buyers and am I out of the game because I can't come close to their offers?

Any input and ideas would be greatly appreciated!

Howie

Mario,

From all the discussion, it looks like the numbers were going to be very forced to make this cash flow at all.  It seems like you just received a gift from our fellow investors here on BP, hopefully they helped put enough doubt in your mind to prevent you from getting into a poor deal.  Be patient, other deals will come along that will make way more sense than what you were looking at.

Best and to your success,

Howie

Talk to people, make offers, feel free to make them aware that you are new at this, be sincere, people will help you.  All they can do is say no or yes, if they say no, move on, if they say yes, and from your evaluation it is a good deal, you can probably find a bunch of other investors on bigger pockets who will come to your aid and who you can share the deal with as you learn.  Set goals, " I will make five phone calls today to talk to sellers, agents, or other investors about their deals.  Be driven and focused, meditate about this before you go to bed and when you wake up in the morning. Read "The Miracle Morning" by Hal Elrod to help set your focus for the day.  It is said that "God wants to give you the kingdom", I think we all have so much magnificent and untapped potential and we can help each other succeed.  How about reaching out to a few investors on Bigger Pockets that you hit it off with to form a Manifestation Support Group, help each other be the very best you can be.

I dropped a chunk of change for one of the Guru courses, and though I can say I received plenty of very good information and education, it simply can't replace the benefits of a true mentoring partnership.   So please folks if you or anyone you know is tempted by the gurus, introduce them to this forum and save them a ton of cash.

Currently I am still a full time veterinarian and part time passive investor, but I am in big commitment mode to actively commit to my success.   It starts with my mindset and my beliefs, I am working on the greater knowing that abundance is available to everyone, we are able to create and manifest anything we want.  I am working on a very strong "why" as well, to be wildly successful in this business and as so many investors do, to then help as many people as I can to achieve the same.

Hi Charlie,

Well I certainly appreciated your honesty.  We are in California and trying to do the work in our own "backyard".  The feeling is that we work with CoStar and some commercial agents but the "on-market" deals are way overpriced and I have underwritten several that in order to make our investors any money have to be offered at up to one million dollars under asking price.  The scenario I described above is meant to do some digging (not an exhaustive or major time consuming process) to locate all the owners of the apartments in our target market and then automate a contact campaign to see if we can stimulate an off market deal (emails, cards, letters, phone calls) and to create more of a working network within that target market.  Our company does have an active fundraising team to fund these deals.

I have found the margins for flipping houses in L.A. to be challenging.

Just some thoughts of my own on why I am doing what I am doing.

My dad was born and raised in a rowhouse in Baltimore, we are all still big Orioles fans!

Thank you for your honesty and input!

Howie Baker, DVM

Wow, thank you all for the advice I will look at each of your suggestions and see what I can come up with!  Be well BP'ers....

Our company is looking to do a direct mail campaign to the area apartment building owners where we would like to invest. We have received a list of the owners from our title company and this is where we hit a snag. A lot of the owners of these buildings are registered as corporations, partnerships, or LLC's. The secretary of state website in California will divulge address information of these corporations but not any phone numbers. The only names listed are those of the "registered agent" who may not necessarily be the best contact person. Of course any skip tracing follows individuals not companies. Any suggestions on how to proceed and who to mail to for the greatest success at contacting these companies would be greatly appreciated.

By the way, the company I am working with now was created by a contact I made here on BP just by reaching out to the local investor list for a meet and greet!!