All Forum Posts by: Jay Patel

Hey Everyone -

I am wondering if anyone has availability in their mastermind for individuals focused around medium sized multifamily investing. Or inversely if there are individuals looking to start a small group willing and able to allocate an hour each week to mastermind and collaborate.

A little about me:

I am in my mid-20's, I work in CRE Finance helping place debt and equity onto multifamily, seniors apartments, and student/off-campus housing assets. So I do a bunch of underwriting from the lender perspective. We've completed about $400 Million in capital placement in the first 3 quarters this year.

From a personal standpoint, I grew up in a family working in multifamily as well as other things. So been apart of the MF realm for about 10years growing up from doing maintenance to property management work. Now with my institutional experience I’m looking to start investing solo/with partnerships. Very into self development, fitness, and surfing.

If you think my profile seems compatible, once again open to joining an established mastermind or creating one with likeminded people.

Thanks !!

@Zachary Jensen

I would agree with this. If you can add value for them in a efficient upgrade/renovation plan that doesn’t overly encumber them then I would alert them of some updates you’ll be making and slap on a 5% increase.

I work as a lender at Walker & Dunlop and flat rents don’t play well in making a story for a refinance. Possible but makes it more difficult to make a case for solid property value increase. If you’re in scaling mode rent increases are the best way to boost value, refi and scale/stack.

 Also, in terms of unit price, it might not seem like a lot still and in many cases it isn't but replacement costs aren't significantly higher in the area (probably changing with cost of construction on the rise), but rents are beginning to max out. So that's just something to bake into the price when searching the area as the product is old and rents aren't rising by much anytime soon. Very similar to midwest fundamentals, but with slightly higher base market rents.

Thanks @Dmitriy Fomichenko

@Taylor L., through Covid most definitely had collection issues, (would love to say it didn't) but we were managing to mitigate or put tenants on payment plans as best we could. Send out notices asap, and get things into the eviction process even while courts were closed. 

In a non-covid world collections have only been an issue periodically with repeat tenants that wouldn't pay, otherwise rents are collected with the understanding that many tenants also pay late, but that's the minority not the majority of tenants.

@Taylor L. Hey Taylor, thanks for the congratulations. It was in Massachusetts. Product is pushing 100k per unit for most deals now, but there are still deals to be found.

Investment Info:

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

Purchase price: $7,250,000
Cash invested: $1,750,000

104 unit in an area where not many units were coming online, 25% owner.

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

Purchased ~16 units previously and saw the benefits of scale

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

Brought to us by a local commercial broker

How did you finance this deal?

Local bank financing, and a portion of which was seller financing.

How did you add value to the deal?

Purchased into a proven premium plan, with about 25% of units being upgraded at purchase, we have upgraded ~60% at this time, collecting premiums in the process. Unit upgrade renovation plan in-place on unit turnover, fueled by property cash flows, slow burn but didn't have extra capital to make this a fast process. But the increases in value allowed us to reinvest into more properties and continue the slow burn renovation process.

What was the outcome?

Refinanced property 3x in order to reinvest into more units, allowing the purchase of 3 other properties.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Local broker, was a pocket listing of a landlord liquidating his holdings for retirement.

I have been doing a lot of research into HouseHacking and determined that this is a strategy that I want to move forward with as I move from Boston to work in the Irvine area. I would be looking towards south LA or northern OC to live. I'd preferably look for a 4plex living in one unit and renting out the other bedrooms in the unit I reside in. I plan on using a FHA loan to fund the deal and use any extra cash to complete any remaining rehab.

Any suggestions on where to begin my search, and who to connect with? I’m not certain I know all the factors to consider in living in this new area.