All Forum Posts by: Joseph Cacciapaglia

You will usually get better cash flow with the multi's, or at least it has been the case in every market I've worked in. Most investors assume their single family properties will get better appreciation, but I'm not certain that's always the case. 15+- years ago Baton Rouge was a great cash flow duplex market, but I haven't been back there since. I'm sure it's changed, just like most other places. I've worked with a couple of Louisiana investors that have come here to San Antonio, because of the stiff competition there. If you're used to self managing though, then it might be a wash for you.

You can't just get foundation quotes and subtract that figure. Often when doing significant foundation work, you would damage the plumbing and create some other structural or cosmetic damage throughout the home. The foundation repair company will typically not cover any of this damage, because it is expected. This is why even a lot of my experienced investors won't touch serious foundation issues, unless it is an amazing deal.

I would be very hesitant to buy a commercial property, if the owner wouldn't share their actual historic financials. There should be no reason he can't produce operating statements, or at the very least past years tax returns. You will certainly have a difficult time financing the project without leases and actual financials. Of course, that's also why there may be a real opportunity. Figuring out your expenses is more difficult with this type of property, than with multifamily, because there is wide variation regarding which expenses the tenants pay themselves or get charged back for, and also what services you are providing. 

One expense I've seen with some retail centers that you didn't mention was a general marketing budget for the center itself. Not marketing to release vacant space, but to drive shoppers to the center, including a website, print ads, etc. I'm sure there are a ton of other expenses that I'm not aware of that you may run into. One thing I like to do when dealing with a property type that I'm not as familiar with, is run the deal by a good mortgage broker, and see how they would underwrite it, and what questions they ask. They are usually happy to train new borrowers for a specific property type.

There is a big difference between an agent that is "investor friendly" and one that actually makes their living working with investors. Imho, you should find an agent that only does investor deals, and you should expect to receive a hand picked list of properties on a regular basis. Saying that the software won't filter the homes is a very weak excuse. In my market, there are some very rough filters, so I don't use auto searches. This means taking the time to look at every new listing in a specific area and price range, and determining if there is investment potential. The only way it works for an agent to take this much time looking for deals everyday, is if they have a lot of different investors to send deals to, depending on who would be interested. If an agent is spending most of their day with retail buyers, then of course you can't expect them to put that sort of time in.

That being said, an agent's only resource is his or her time. I know I'm quick to fire clients if they aren't willing to move on deals that fit into their stated buying criteria. I know you can find agents that will do more for you as an investor, but you have to be sure you're keeping up your end as well. This means making lower offers, if and when your agent brings you a deal that looks retail, but the agent has good intel that they'll take something lower than list.

I used to work in South Jersey, but haven't for a number of years. There was an active REIA that met regularly in Collingswood when I was there. If it's still going on, I'm sure you can find an agent or two that devotes all their time to investment deals.

You have probably already studied more than half of the successful investors. I hate to quote other gurus from the internet, but how prepared for doing 50 push ups can you get by reading about doing push ups? Once you understand the basic technique, you just have to start doing them. It's the same for real estate. You already know the technique, now you have to start the doing. You'll learn a ton on your first deal, and you'll be more pumped for the next one. You will never be 100% prepared for anything in this business. You have to accept being 80% prepared, and trust that you and your team are good enough to figure the other 20% on the fly.

Right now there is definitely more risk of them rising than falling further. There just isn't much room at all for them to go lower. If I had anything that worth refinancing at current rates, I would lock immediately. Of course, I agree with the comments above about not being able to perfectly time refis.

 I have seen people do it as much as a couple years out, because they needed to in order to refinance. The further out you are, the more value you have to offer them.

If you have a lawyer that routinely handles these types of lease negotiations, you should be fine without a broker, but one way or another, you need someone with insight into the current market for lease terms. I've had clients that negotiated early extension options with national NNN tenants on several occasions. You have to be offering them something of value though. It seems like the 2.5% lower increase would be compelling, but it will depend in part on how well the location is doing and what market lease rates are today. They may have been planning to negotiate a lower rate with you, instead of exercising their option.

I think it's important to look at your situation, and understand what you're bringing to the table. Do you have good income, a good credit score, and a decent down payment? If so, agents should be fighting to work with you. If you're missing any one of those, you have to figure out a strategy that alleviates that shortcoming. If you have none of them, it will take a tremendous amount of hustle to succeed.

It may be that your resources aren't sufficient in your current market, but that you may do better in a market with lower barriers to entry. I've worked with investors that have had a lot of success spending their California dollars in Texas. I know people are doing this in several markets throughout the country. I find they have an easier time raising money in locally to spend elsewhere, because they're providing a resource that isn't immediately available to their investors locally.

The situation can change from one wholesaler to another, because it isn't a regulated profession, but in most cases in my area, you don't have any reasonable "outs" once contract with a wholesaler. In my market, with a on MLS deal, you'll typically have 10 days or more to do your inspections, and can back out for any reason if you don't like what you find.

Some wholesalers may provide recommendations, but remember, you are not their client, they are selling a contract to you. An agent will usually have a fiduciary duty to you, and therefore shouldn't just provide any old recommendation. They are usually required to have your best interest in mind, where wholesalers have no such duty.