All Forum Posts by: Arn Cenedella

Agreed. 
We have closed on last three acquisitions with local credit unions here in Greenville SC. 
Loan amounts between $2M and $4M. 
Got some IO and also 30 year amortization for some of the BTR product we have acquired. 

@Karolina Powell

I second @Charles Seaman comments.

I would add since you own other rental property in the area, you probably have a good grasp of rental rates as well as expenses in the area. You should have a clear understanding of property tax rates, insurance costs, repair costs, utilities, landscaping etc.

Any buyer must develop their own proforma and that is what should be relied on. The seller data is useful but it must be evaluated within the context of your own investing knowledge and experience.

A local property manager who manages similar assets can also provide useful data.

Use your local market knowledge and experience to develop a proforma you feel confident in and proceed from there.

Arn

@Ting Liu

Since property was in your name only, I doubt any partnership return was filed.

Did you form an LLC with your partner? Do you have an EIN? If not, I'd bet there was no partnership return.

Assuming a 50/50 split, you should take half of all income, expenses and profit and report that on your return. And your partner should do the same.

Hopefully your partner is trustworthy and Will dutifully report his profit in his return.

Another possible approach would be to issue your partner a 1099 for half the profit. In that way, there will be an official trail of the agreement.

Of course, best answer is consult CPA.

@Greg Scott

For sure, I’d differentiate my list with your list as follows:

My list is about the core MF team - the general partners in a syndication deal. Perhaps you are excellent at all four roles I outlined. Your list is more about the 3rd party vendors absolutely needed but who in my own are outside the core ownership team. Let’s call your list associated professionals.

What does it take to put together an effective MF investment team?

Folks may be familiar with the terms “visionary” and “integrator”.

MF teams need both.

The visionary is full of ideas, has a high level of vision where he or she wants the business to go, maybe sometime loses track of the practical nuts and bolts, and is perhaps not very detailed oriented.

The integrator makes it all work. Systems, processes, efficient, organized, steady, handles all the details.

Another model is:

1. The Hunter - finds the deals, networks with brokers, risk tolerant

2. The Hammer - gets the job done, runs the asset, PM, and AM

3. The Mind - the analyst, the underwriter, financial and accounting

4. The Money - raises the capital

All four skill sets are required. Rarely does one person have all these skills.

On my team: I’m the Hunter, Brian is the Hammer, Dan is the Mind and we all bring capital.

Put these skill sets together, and your MF investing journey will start to soar.

@Gino Barbaro

Excellent info.

Folks may be familiar with the terms “visionary” and “integrator”.

MF teams need both.

The visionary is full of ideas, has a high level of vision where he or she wants the business to go, maybe sometime loses track of the practical nuts and bolts, and is perhaps not very detailed oriented.

The integrator makes it all work. Systems, processes, efficient, organized, steady, handles all the details.

Another model is:

1. The Hunter - finds the deals, networks with brokers, risk tolerant

2. The Hammer - gets the job done, runs the asset, PM, and AM

3. The Mind - the analyst, the underwriter, financial and accounting

4. The Money - raises the capital

All four skill sets are required. Rarely does one person have all these skills.

On my team: I’m the Hunter, Brian is the Hammer, Dan is the Mind and we all bring capital.

Put these skill sets together, and your MF investing journey will start to soar.

@Michael Paywala

I am a multifamily investor located in Greenville SC.

Always looking to buy more apartments.

Maybe we can meet up when you are in Greenville sometime.

Arn

@Phillip Dakhnovets

I agree with what @Greg Scott says about how focus on cash flows can lead to purchase in problematic areas. The cash flow always appears better in C and D locations. But the question is whether one can actually achieve the proforma cash flow on older properties with a less economically stable tenant base.

Based on your picture, you appears fairly young.

My advice is buy properties in quality locations think long term 10 to 15 years - slowly and safely build your portfolio - equity and cash flow will increase over time and in 10 to 15 years you may become financially free.

People talk cash flow is king but one can NOT generate financial freedom cash flow with $250,000 or $500,000 invested (equity).

Even at a 10% cash on cash return, one needs $1.2M invested to generate $120K a year $10K a month.

You want property to be self supporting so it needs to cash flow but once that is reached the focus in my opinion should equity growth which increases net worth. At a certain net worth, folks don’t worry about cash flow they have all they need.

@Wil Reichard

Cash out refis are generally more difficult than purchase loans or refinances at existing loan amount. With a purchase loan, the assumption is the contract price is market value so purchase appraisals will generally come in at contract price. With cash out refis, there is no market input on value.

The time period since acquisition is also an issue.

If I understand the numbers - $30K plus $440K loan plus $80K assignment fee - total “purchase” price is $550,000.

I would assume lender is asking how is current value one year later $725,000 when you effectively paid $550,000 a year ago? Did lease rate go up significantly in April 2024?

The loan amount is problematic. Most commerical lenders want $1M or more minimum.

You might reach out to Nikki Cooper at Truliant Federal Credit Union if you have not already.

You may just have to ride our existing loan until lease rate is bumped again.

@Mikhail Pritsker

Nice lost to start the conversation and LP due diligence.

Thank you,

Arn