All Forum Posts by: Hunter Kahn

Hey All,

I've been working on getting my first rental(Multifamily, 6-12 units, locally) and I think I came in too ambitiously. I'm starting out with relatively low capital and as I start honing in on prospects, I'm just now realizing that I haven't yet calculated closing costs into any of my deal analysis. Embarrassing, but...this is reality. I've been looking primarily at deals that offer owner financing or are otherwise open to a creative deal structure. It seems like there's a lot of variability in the category but I'd appreciate any experience this community would be willing to share!

Thanks so much in advance!

-Hunter

@Lee Ripma it seems like you were predestined to answer this question! Thanks so much for the input and you can bet I’ll be listening to your episode ASAP! 

Hello Everybody!

     I've made a couple of posts over on the "Starting out" thread but I'm here looking for some input on a potential strategy that I've recently started working on. I'm new to RE investing and it's been a wild ride with a lot of learning and new contacts in my phone and email. So I'm yet to develop confidence in discerning between a hair-brained idea and a good strategy. What I'm seeking here is guidance from the greater experience of the BP community. Thank you in advance for any help you can offer!

So, here's what I'm thinking. I have two areas in which I'm looking to invest: Kansas City, MO and Boulder, CO. The latter is my own backyard and the former is out-of-state but just close enough to make a road trip to if necessary. I've been in contact with people in both locations around the potential for each city. 

Boulder has low and declining cap rates, but appreciation has been quite admirable and there is a lot of potential for value-add in small multifamily in the area. Now, KC on the other hand has a cap rate that's about 1.0~1.2% higher and it has been rising in recent history. However, appreciation is lower and prices are roughly one-twentieth of what I'm seeing in Boulder. 

With these considerations, I'm considering a double-headed approach. I'm currently actively looking for multifamily properties in both cities. The approach with Boulder is to find a distressed small multifamily (3-4 units) complex that I can rehab and house-hack. Major benefits here are that I can decrease my living expenses and take advantage of the disproportionate appreciation. Simultaneously, I'm looking to get into a larger multifamily (between 6-12ish units) in Kansas City, MO to build up equity faster and get some cash flow as a bonus. After a couple of years, I will move out of the Boulder property, refinance it, and use the additional funding to acquire more property. 

Let me know what you guys think. Is this too much too soon? Ambitious but doable? Or a good idea? Any and all feedback/input is welcome!

Thanks in advance!

Hunter

Hi Everyone, 

      When last I posted I was asking about how to get information on properties. Seeing how many people wanted to help with my predicament was inspiring. Now, I'm coming to you with a new question. 

     In my quest for property #1, I've been making a lot of new acquaintances in the hopes of doing business with many of them. I keep hearing that building relationships is key to getting the best deals and I'm looking for good ways to do this. Now, I know how to make and have friends but my struggle is that I'm not yet equipped to do any business. While I am working up to this point rather quickly, I'm trying to determine what is important to agents, brokers, lenders, attorneys, and PMs such that I can be of value to them until I'm able to actually buy through, borrow from, or otherwise employ their services. 

     For context, I'm currently building my presence in two markets. First, in Kansas City, MO. Where I was discussing in my last post based on cap rates and price to rent ratios. Now(and on the advice of BP community member @Nicholas L.) I'm also looking into my local market (particularly Boulder county, CO) because of year-over-year appreciation and the amount of distressed multifamily that exists there. 

     In both areas I've started to make connections by reaching out to investor friendly agents and brokers. In both cases I've found that these people are friendly, great conversationalists, and very helpful when I've been honest that I'm both new to the market and as an investor. So at this point, I'm looking for ways I can foster these relationships until there is a deal to be done. 

     It may be the case that the answer to this question is simply to be friendly, treat them with courtesy, and be a decent person. If that is the case, I accept the redundancy of my question. But if there is any value I can provide in my new-found relationships that someone with more wisdom or experience than I knows of I would be greatly appreciative of your input!

Thanks again!

Hunter

 

That's a great idea Nicholas!  

To everyone who has commented on this thread, I want to extend my gratitude to you. As this was my first post, I didn't know what to expect and you all showed out with kindness and generosity with your knowledge. So I just wanted to say thank you all!

@Evan Miller

Glad to hear from another mile-high investor! 

On Question 1: To make a long story short, I had been pondering strategies for a little while and I kept going back and forth between starting with an out-of-state single-family BRRRR or getting into multifamily right out of the gate. I have access to a couple of investors who have mentioned that they would be interested in partnering with me if I brought them the right deal. So I knew that multifamily wasn't off the table, necessarily. But it was also the less familiar of the two to me. After meeting with my mentor a couple of times and discussing strategy he presented me with the idea that if I was going to go into multi-family with the intent to hold a long time, it would behoove me to think bigger than the 2-4 units I was imagining at the time.

The cost of mistakes with this larger-scale project has been a major point of concern for me and I'm glad you brought it up. I've been affectionately referring to this as "The Magnitude Problem" and the best solution I've come up with for it is having the right partners in the deal. Sacrifice a percentage of ownership on the basis that their knowledge will be crucial in mitigating the impact of such issues or (ideally)avoiding them altogether.

On Question 2: I've been working on building my relationships with agents and brokers in the area so I'm happy to hear that's a good way to get going on this! I'll need to play around more with the tools in BP to get a better feel for them.

On a final note: 'Sko Broncos
Thanks again, Evan!

 Hey and thanks so much for being a part of this conversation, Michelle! I haven't made it past the broker(full disclosure; it's intimidating) but that's what I'll need to do. So making contact with the sellers and property managers (and getting comfortable with it) will be one of my big action items here. I recently read/heard of a few good things to ask about when you do get in contact so I'll keep my resources handy and get into this part. 

Can I verify my understanding that; after you get the various documents that come down the pipeline after the deal packet it's a good idea to ask about the history of the building, various maintenance costs(roof, electrical, plumbing, etc.), and any irregularities that can be found in the data? 

Retrospection for anyone like me finding this later on: BiggerPockets did this video a couple of years ago about what steps to go through when underwriting a property(such as what I'm looking at) and I felt it to be really helpful for getting an initial understanding of what "Underwriting" meant.

 Thanks again Michelle! Both for your input and your well-wishes!

 Brilliant. Thanks Julien!

 I think between what you and @Robert Payne mentioned, I have a pretty clear path forward. Thanks for sharing your knowledge with me!