All Forum Posts by: Jim Biggs

I'm interested to know how long term hold strategies work on multifamily. I've never done a large multifamily deal but when I do the math not sure how anyone can make any Money on a property doing a 6% CAP or less. I'm obviously missing something so if anyone can set me straight or recommend some reading I'd really benefit.

For instance:

10 unit Asking price: 1,000,000

NOI: 60k

Down payment: 250k

Reserves:50k

5.8% interest Loan:750k

P&I: 52.8k

Adam your rate and terms are very normal for smaller properties financed by local banks. But as noted by several others there are much better products out there. The issue is loan size. Most of the "Agency" lenders require minimum 1 mil. financed to qualify. I would encourage you to look at a slightly bigger property to put you over that hurdle. There are "many" more benefits to getting this type loan product. Actually I would encourage you to consider buying as large a property as you can as interest rate are at historical lows and your timing might be perfect, especially as it relates to a seller that needs to sell at a moment when everyone else is hitting the pause button. Just my 2 cents.. but you know what they say about free advise :) that is my legal disclaimer.

How is everyone preparing their apartment communities for the corona virus? What are you guys doing incase an outbreak happens?

My company has been meeting daily on virus planning and actions to help keep our team members and customers safe and informed.  It involves proactive communication, location closure protocols, PTO and compensation changes, home office equipment orders, testing of remote work plan, and many other steps.

I have not heard anything from my 3rd party property manager...  And only 1 email from all the sponsors that I invest with.  We could use more proactive communication.  And definitely need to hear the testing plan from the oval office.

We have long been believers in leveraging technology for efficient business administration and continuity. We have adopted mostly cloud-based infrastructure for property management, accounting, investor reporting, document storage and internal communications. In 2017 and again in 2019 our corporate offices were evacuated for extended periods due to the wildfires in northern California, which allowed us to fully battle-test our systems. We were able to continue operations with hardly a scratch despite our entire team being disbursed.  While the scale of this health-related emergency is unprecedented, our ability to function in the face of sequestration is not.  We are as ready as we can be!

@Brian Burke   We thought that we were well prepared, indeed we were but this unprecedented event showed some flaws in our battleplan and afforded us the opportunity to "MATH" :) Always love your insight