All Forum Posts by: Jesse Chunn

@David Faulkner

Very, very good points. Thanks for taking the time to lay them out like that. From what I have seen so far, the #1 downside to multi-units, especially large ones, is that if you need to get out, you will probably either have to wait a while or take a haircut, or both. Unlike SF's, they are basically 100% bought by investors, which are much fewer, and are looking for bargains. That is just the kind of advice I am looking for.

@Gino Barbaro

Thanks for that. I will say this... I AM staying with the deal (as long as it makes sense) because to your point, and just like with any business deal, the more difficult it is, the less competition you will have...

@Gino Barbaro

I certainly agree with your point. I often say that "determination" is the most valuable asset anyone can ever attain, and the number one most common factor among all successful people. I started from nothing, and I wouldn't have the money I have now if it weren't for that. By the way, I just coincidentally watched a video that had you in it (at jakeandgino.com). Pleasure to make your acquaintance and thanks for chiming in.

@Brett Tousley

See my above comments. I would assume the same, that a broker would be tripping all over themselves to get me into properties and do whatever else it takes to keep me interested and moving forward. Maybe I have just had some bad luck.

@Roy N.

Would you believe I was discussing a 32 unit complex with a broker (seller) via email and politely asked for a copy of the rent-roll "asap" (meaning "as soon as possible" obviously) and he responded very rudely "I don't do asap. I'll get it to you next week." I find that disgusting, rude, and unprofessional beyond belief. I really don't know how people like that stay in business.

@Cassie Sherie

Yes, I have already looked into a non-recourse loan (that will be the route I take). That is great advice for anyone that doesn't know about them. For those reading this, look it up. I am finding that apartment complexes generate only slightly less cash flow per unit, but the economies of scale and lower cost per unit make them a no-brainer if you have the initial cash to get started. That was exactly why I started this thread.

@Cassie Sherie

Thanks for the encouragement Cassie, and thanks for pointing me to

jakeandgino.com. I will check it out, as well as the courses you mentioned. I think that when I was a much younger man large apartment complexes would be far too intimidating and I would probably fall on my face, but now (I hope) I have enough general business and life experience to figure it out.

@Roy N.

Roy, your comments basically mirror mine, with the big difference being that you have some experience to back it up. And I appreciate the advice on working with an experienced person...

@Jake Henrion

Thanks for the book recommendation and the point about a team. I am "trying" to build a team, but it is tough when you don't have any history to help make yourself stand out from every other tire-kicker and wannabee that wants to waste their time. Having a little money to start with does help, but it seems like I may need to just jump in and form a team from the people that I wind up dealing with (or at least the ones that are competent). It turns out that there are plenty of incompetent brokers out there (in my humble opinion). Maybe my background in the business world makes me a little more critical, but in my opinion a broker should be all over me once I show serious interest in a property, rather than me having to prod them along for each tidbit of information. It is almost like I am a bother to them, and they need me to tell them what I need to see. If I have to specify "rent-roll" for example (when looking at an apartment complex), in my mind either they have something to hide, they are lazy, or they don't know what they are doing. But I digress.

I am new, have not bought my first property yet, but I have been a "businessman" for 20 years. I have a higher than average tolerance for risk, so long as it is "calculated" risk. For the sake of this question, assume that I have good credit and $500k under my mattress (not really under my mattress, but available).

So, the question is "Why not apartment complexes?" I have looked at (analyzed) a few dozen potential single-family deals, and at least 15% of them were worthy of further investigation. BUT, I would have to go through the whole process of: Analysis, Loan, Close, Rehab, Rent.... for each one, about 100 times (literally) to get to my goal of approximately 20k in passive monthly revenue, and my properties would be scattered all over the place, and it would take forever (many years by my estimation).

On the other hand, I see that there are apartment complexes out there to be had with (for example) 70 units, $90k net operating income, that can be had for a down payment and rehab cost of maybe $500k. Obviously the reality is all over the map, but I am finding this to be doable (on paper at least).

Now, I am not an expert, but it seems that almost all "Make Money in Real Estate" books, and this website, are geared towards folks that don't have $500k burning a hole in their pockets... so there's not a lot of conversation on this topic... Am I naïve to think I could pull something like this off? I like to think big and go big, but I also try to be smart about it and avoid stupid mistakes. Would it be a stupid mistake for me to go down the path of 70+ unit apartment complexes right out of the gate?

@Ian Walsh

I appreciate that insight. That seems to be a running theme, along the same lines as assuming you will be paying for property management even if you really intend to manage the property yourself. Plan for the most-encumbered scenario and if it works in that "conservative" scenario then you have the best likelihood of good cash flow and cushion in case of problems.