All Forum Posts by: Joel Florek

@Matthew Shay Generally, I am underwriting at $750 to $1500 per door per year for maintenance payroll and materials. The difference depends on size of the units, age of the property and type of mechanicals. 

Insurance typically ranges in the $220 to $300 a door for me in my investment areas. 

CapX/Reserves is usually $250 to $300 a door, but I may increase to $500 if the property is older and has a lot of big ticket items coming up. 

Property management/leasing changes based on a small property vs. a large property that will have on site employees. They underwrite totally different. For small properties I am doing 5% at the low end if its a very easy higher end apartment. For rents in the $600 to $800 range I am typically doing 8%. When you get to larger properties you will have payroll, benifits, admin/office costs, and then a property management fee on top of 3% to 6% depending on the group. 

You will need to check with your banks to see if they will allow the seller to carry a 2nd position mortgage. In my case, I have purchased both an 8 unit and a 16 unit via 80% bank financing and the seller carrying a 2nd position note of 10% and 16.5% of the purchase respectively. This allows the seller to get most of their money and keep a little skin in the game to help you get to the closing table with higher leverage. This will be a loan performed on the commercial side of the bank as opposed to the residential side. The application process and underwriting process changes depending on which side your on. 

 Progression thus far. 4, 16, 3, 8, signing as a KP on a 107 unit, and hopefully under contract on a 15 unit for myself this week. We will see.

 I currently own and manage 31 units between 4 properties. The focus has been small multifamily with value add. 

This year is all about scaling up to working with investors to tackle larger assets. Signing as a KP on a 107 unit deal and hopefully working with other syndicators on some deals in the future. Actively shopping for my own deal to sponsor but missed out on a few best and finals as of recently. 

Best of luck in your search! If your interested in the MidWest would love to get to know you better!

@William Kim There are a lot of options these days which makes it tough. In talking with folks in your position I have found that there are a few approaches people take. 

1. Find the syndicator they like with a good track record and sign checks for deals trusting they are in a good market and getting a good deal. Obviously you can do as much or as little due diligence as you would like on each deal.

2. Do some research yourself to find a market or markets you are particularly interested in and find the folks who are buying properties in that area. One way to find them is to make calls to brokers who are selling multifamily properties and let them know you are a passive investor looking to meet with multifamily syndicators in the area and are hoping to get connected due to your interest in a particular market.

@Joe Ansley there are some great ones listed already so I wont repeat. I saw @Ben Leybovich respond so I will add another plug for his new podcast. Its a different format which I like for the sake of more focused learning. Youll just have to get over Ben talking about how he wears the same shirt for 9 days straight ;)

@Aqeelah M. Posts like this to start the process of connecting with others. Then its a matter of getting on phone calls and learning about other businesses and their needs. Often times starting out as a passive investor in someone elses deal is a great way to get started. Beyond that, its going to meet ups and having a lot of conversations. No silver bullet but conversations snowball! 

 Agree 100%. These are the times where we need to maximize the real value of our assets, clean up deferred maintenance, pay down debt, and put ourselves in the best position to strike when things make a bit more sense.

However, even in boom times there are deals to be had, although there are far fewer and potentially not the types of deals you wish you to be doing. There is always a way to keep forward progress!

Adding myself into this to follow the conversation. Looking at some stuff in Michigan and Indiana that is under HUD and USDA and trying to connect with folks with experience.