All Forum Posts by: Jaryn Pierson

 Yup great call.

Ok Loopnet it is I guess. I haven't had the best of luck on there as I feel like the numbers it generally shows are vague at best but I'll start digging a bit deeper into them.

All great answers much appreciated !

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $410,000
Cash invested: $75,000

Buy and hold 8 unit apartment building in downtown Pittsfield, Ma. Over extended a bit to purchase it but now that I'm 6 months in i'm happy I did. Lots of ups and downs getting everything stabilized over the first 6 months and plenty of weeks running on the PB&J diet. Putting $0 as a cash flow number because especially right now while I'm getting this property sorted it makes more sense to me to pump all the income right back into the property to get it to reach its potential.

What made you interested in investing in this type of deal?

Reading The Multifamily Millionaire by Brian Murray (and Brandon Turner) pushed me to stretch and go for a bigger multi family building instead of another duplex. Very happy with how its turned out so far.

How did you find this deal and how did you negotiate it?

Found the deal by calling other landlords in my neighborhood and asking them if they had anything they wanted to sell or knew anybody in the neighborhood who might be interested in selling. 'Negotiated' the deal directly with the seller and I say 'negotiated' in quotes because both the seller and I were very happy with what we landed on and how we landed on it.

How did you finance this deal?

Seller financed the entire purchase not including my down payment at 5% fixed with a 20 year amortization and a 5 year balloon. Seller also agreed to finish many of the updates they were doing to get the building in good sellable condition.

How did you add value to the deal?

- got residents on leases & up'd rents in a reasonable way
- got rid of a couple problem residents that were degrading the living situation for everyone else in the building
- cleaned up the outside / grounds a bit
- did a punch list with each resident upon closing and went through each unit and completed tasks they were looking to see fixed
- turned 2 units and upgraded everything inside
- currently putting a lot of time and effort into getting the boiler and all radiators humming nicely

What was the outcome?

So far very happy
Property is supporting itself
The debt is good
The residents are happy
I'm slowly getting the building to 'look' like I want it to but am staying patient and committed to the outcome

Lessons learned? Challenges?

Below are all lessons that I've learned after reflecting on the last 6 months of this new property.

Treat all people you meet along your journey with respect, there will be a lot of them.
Treat all residents in buildings kindly and professionally.
Never operate from an 'i'm broke' or 'fear' mindset because poor reactions will be made
As real estate investors we have a great responsibility to our communities, our residents, and our buildings and we should take that seriously.

Hi All

Starting to pull together some goals for 2024. It is not going to be a buy year for me most likely as I want to pay down some debt and refine a couple properties a bit. That said, I want to be in a strong position to buy in early 2025 and need to spend some more time focusing on underwriting better.  I'd like to continue to build out my portfolio in the 8 - 20 unit per property space and am committing to underwriting a couple deals a month. As you all know it can sometimes be tricky to find listings that have solid numbers that can be trusted or any numbers at all for that matter.  Besides my local commercial broker do any of you have a good source for a steady stream of listings that I could spend some time underwriting?  I'd also be happy to run some numbers for people looking at deals relatively close to that size and would keep the numbers private if asked to.

Any info would be greatly appreciated.

Thank You !
Jaryn

Tossing out something here that doesn't always get spoken about.

Purchased an 8 family unit 4 months ago, my second property, and was certainly in over my head. Lets call it growth. Was able to get all the existing tenants, who weren't on leases, leased up with projected rent raises in the first weekend. It was a dusy, incredibly scary and stressful, but all in all a good job done.

I did do estoppel agreements with all the tenants prior to closing but I missed one of them that claimed that the had a 'verbal' lease agreement with the existing owner. I totally missed that he said that and he was not down with the idea of a rent raise coming 2 months after I took ownership. I went back and forth a million times about how to handle the situation and decided that 6 out of 7 (i had one vacant unit to renovate) tenants with signed leases and rent increases was good enough for me and that I'd deal with him down the road. As the past couple months went by we would make occasional small talk and he was always pleasant but I always felt like he was lying to me and that he thought he was getting one over on me. After the first two months of month to month leases I was getting everybody onto new updated leases at one year's length with new rents and I knew I was going to have issues with this guy again. At this point it was clear his girlfriend was going living with him against the lease but as we all know that can be a really tough thing to pin down. Anyways, I gave him the option to either sign a new month to month lease at his current rate, or that he could sign a one year least with a $100 increase and be locked in for the next year at that new rate. He opted for the month to month at the current rate (obviously). 

My phone rang yesterday and I saw his name come up on the caller ID and I just had that pit in my stomach feeling. He wanted to let me know that he found a new place to go to and was going to be moving out at the end of the month and that his last month's rent was in the deposit box. 'OK SOUNDS GREAT LET ME KNOW WHEN YOU NEED HELP MOVING !' - Me (haha)

All that to say that I always want to be as professional as possible as a landlord BUT sometimes things are not so black and white. Kind and professional, those are my mottos. A little bit of patience, and some gentle pressure continuously applied went a long way on this one. I think just staying on top of things and being persistent sent this guy the message that he wasn't going to be able to take advantage of me and I got him out without any need for legal fees, yelling and screaming, or (so far) trashed apartments. Very happy to say that sometimes in this business patience is our best tool.

 Hi Kaitlin

What makes me nervous here is how you call yourself a Newbie and are trying to start off with 2 partners. I don't want to take the wind out of anybody's sails, but I would be very careful starting out with other people unless you are the one bringing the money and the other two are experienced operators. 

From the way you've phrased this, it sounds like you may be putting the cart before the horse a bit here. Buy your first property, if you don't live in it, maybe put that thing into it's own LLC. It'll be filed as an addition to your regular tax return.

But right now, thinking about LLC's and Tax Code's and 15.3% yada yada are just all going to be reasons to convince yourself not to go for it. Buy a small property, four or less doors, and see how it goes, worry about all that other mumbo jumbo later.

Ahhhh that's an interesting concept.  I have heard about that a bunch on the podcast but hadn't thought of it.  Then my ego gets no love and I can't walk around like I own the place haha!  Really good option though I'm liking that!

 Yea Mason that is a good way to think about it.  I guess when sales happen tenants are expecting some changes to happen.  Scary for sure, but if the inspection stuff comes back how I want it to I'm gonna go for it.

Link to NumbersHello BP!

I first just want to say thank you all for being here. Although I am an avid BP content consumer, I am not one to post very often on the forums. So far to date I own a duplex which I bought last year and have had great success with. I also manage five additional STR's for other people. New to the real estate game, but like all of us I've caught the bug. With that said . . .

I am rounding the corner on my next deal. Pushing all my chips in to an 8 unit apartment building down the street from my first duplex, in the western part of Massachusetts, a very tenant friendly state. Deal is seller financed, $400k purchase price, 15% down, amortized over 20 years with a 5 year balloon at 5% fixed for the duration of the loan. The seller and I are about 24 hours out on having a signed purchase and sale. Last pieces of the puzzle are getting sign off from an architect that the building will (hopefully) not need a sprinkler system and will be completely up to code. The building is technically zoned as a rooming house, as two of the apartments share a bathroom. Aside from that its basically all one bedroom one bath studios with their own kitchens in each unit. All CAPEX is in really great shape. Each unit will need a refresh on turnover but out of the gate things are running smoothly. The plan for the property will be to short term / mid term rent the downstairs three units if / when the tenants vacate while having the upper five units on long term leases. Lastly, I am planning on living in the vacant downstairs units while STR'ing it on the weekends as I'm out of town Friday - Sunday so that helps ease some of the negative cash flow off the start as it is essentially my 'rent', at least that's how I'm justifying it for now.

My knees are currently shaking as we get to signing as the biggest 'fix' I have to do with the property is raise the rents.  They are all at about 50% of market rate.  I do not need to dramatically raise everybody right out of the gate, but I do need to consistently bump them over time to get things to cash flow how I'd like.  Of the 8 units 7 are currently rented and up to date on rent, with 5 of them being significantly under market value.  The seller has had the property paid off for decades and in his words 'just hasn't needed to raise them'.  So, my question to you all is, how in the world am I going to have the conversation with these tenants that their rent needs to go up, significantly, even though I'm not planning on doing major repairs / updates to the building because it doesn't need them.  I've attached my numbers below at three different stages of the deal.  Basically as is, after small rent hikes, and down the road where i'd like it to be.

Thank you all to any feedback.  75% of me says 'Just do it dude !' while that little voice on my other side says, 'ARE YOU FREAKING CRAZY!'.  

Lastly, all the numbers are in the viewable link below.  Thank you sooo much to BP for the new book about analyzing deals, although I haven't gotten the book quite yet the spreadsheets made available are awesome!