All Forum Posts by: Jered Sturm

ARV stands for After Repair Value. What this really means for a SFH is what do comparable properties like this one sell for once you are done doing whatever you're going to do. If properties in that market sell for $500k with top of line high end finishes the ARV is $500 IF you do high-end finishes. If comparable properties with midgrade finishes sell for $480 then the ARV is $480 for midgrade finishes.

It's all based on what others are willing to pay.

No, lenders will want their position secured and with no equity there is no place to be secured. 

@Patrick Philip You will be looking for opportunities to increase income or decrease expenses. That is the beauty of Multifamily. You can control the value by seizing the opportunity and oiling the machine to max efficiency. The opportunities on how to do this are only limited by creativity. Many people focus on the obvious stuff like raising rents increasing economic occupancy and so on. But there are many other ways. Also so often many focus on increasing income but the inverse of decreasing expenses is equal if not more powerful because it often doesn't have more cost to your residents. 

Here is a blog where I wrote about a recent 42 unit we bought and did creative things to add value. 

https://www.biggerpockets.com/renewsblog/bought-multi-million-dollar-apartment-complex-age-26/

Just a few ways to produce ancillary income:

- Laundry

• Coin laundry
• Detergent/laundry essentials in a vending machine in the common area laundry rooms.
• Rent individual W/D to each unit

-Parking

• Garage parking
• Covered parking
• prime spot parking
• Just plain old charge for parking

-Renovations

• Interior units upgrades
• Common area renovation
• Exterior upgrades for curb appeal

-Vending machines

• In common areas such as exercise room, pool house, laundry or leasing office

-Trash pick up service

• In high-end buildings they have a service where you can set trash outside your door and for a fee maintenance will go around each night and collect it so the resident doesn't have to carry it to the dumpster.

-Pet rent

• Depending on your building you can add income by allowing pets and charging for them.

-Storage units

• Small closet size or even garages.

-Sub metering of utilities or RUBS

-Renegotiating all operating expenses

Survey your residents and ask "What would make your living experience better here at _______" This will open the door for ideas and they use your creative to build on those suggestion and figure out how to solve a these problems your residents have. 

@Mike Xiao

As our company is now expanding into a new market my business partner is constantly reviewing the multifamily outlook and what markets are strong and which are weak and why. 

He sent me a link to some really easy to read, useful information the other day on specific markets for multifamily and data behind the projections. 

You can find the report Here. It is well worth the read if you're researching markets for multifamily nationwide.

This report is focused on growth potential. Picking a market depends on your goals. If you want cash flow you may look to the midwest or other strong cashflow areas.  if you want wealth preservation and potential appreciation than the strong markets of Orlando, Phoenix, Atlanta, Fort Lauderdale, or Vegas might fit your needs. 

Best of luck on your venture. Let me know if I can be of help. 

Your thinking is spot on. If you are keeping two in your personal and all other in new LLC then EVERYTHING needs to be separate. Run it as if you worked for the LLC not as if you were the only owner.

It sounds like you grasp the concepts well and know what to do. It's not fun and can cause a little extra work, but ultimately the LLC is the way to go.

We now have 5 LLCs to hold different sections of the portfolio each has its own bank accounts, income statement balance sheet. They are different companies and therefore must be run as such.

best of luck!

$30k houses can be a lot of work especially if they are habitable when you are purchasing them for $30k. It is doable but there can be a lot of hidden costs. You are correct it will be hard to find anyone to lend on this type of property. It simply isn't worth the banks time effort and risk. If you decide this is your path you may need to find non-conventional financing. 

Best of luck on the venture.

Hi @Tammi M. I unfortuntly don't have a recommendation for you on exactly what you asked for. I will pose the question why do you need them to be ATL based? We use advisors from all over the country. We used to find all local advisors when we first started and then realized in today's fast paced highly tech world we never were going to their office anyway so there was no need to stay local. Food for thought. Good luck on your search

Ken McElroy has two great books. I can't recall the titles but they were good reads on multifamily. 

A little bit of a drive for me, but it sounds like a great topic to focus on. I will do my best to be there!

@Shane O'Donnell I have not worked with this gentleman as my business partner is licensed, but he has several investor clirents, does invest in SRFs himself. 

Check him out here http://www.kw.com/kw/agent/morganandmorganrealty

Feel free to use my name when calling.

Best of luck!