All Forum Posts by: Jarett Tigges

Investment Info:

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

Purchase price: $600,000
Cash invested: $178,000

14 Unit Apartment Complex Value Add. All 1bd/1bath with average rents at $498. Plan is to take rents to $550 through unit renovations and added security on the property.

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

We have been searching for our first apartment complex for about 5 months. We had sent out several LOI's and negotiated deals but none of them hit our minimum profit requirements (CoC return: 8%, IRR: 15%) unit this one.

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

We found this deal driving for dollars. We were actually out looking at a property near this one and really liked the street it was on. We cold called the owner and he was interested in selling. We established his motivation (this one was farther from his other properties and he was tired of dealing with it) and told him the price that worked for us. He countered some of our terms and we countered back till he agreed.

How did you finance this deal?

We obtained owner financing on this property. $480,000 on a 30 year amortization at 4.6% interest with 1 year of interest only.

How did you add value to the deal?

We are currently renovating the first unit and we plan on bumping rents from $550 with utilities to $600 with utilities. Tenants in this area like to have utilities included, and we actually make a small spread on the units where we pay utilities.

Hey NM community,

I have a question about the zoning laws for small multi-family. There is this property that is zoned for "R1-C" which is single family, but they are listing it as a 4-plex. I know that this zone allows for a detached unit so it can act as a duplex, but how are they listing it as a quad? Also, if this is allowed to act as a quad, does anyone know if you can sub-meter on a R1-C zone, or does it have to stay master-metered? 

Any advice would be much appreciated!

Thank you,

Jarett

Great advice @Samir Shahani, thank you!

Looking for a little advice on obtaining my first loan for a small multifamily property. I'm 21 years old attending university for a couple more months. I have a good paying job, but its technically part time because I'm paid by the hour. I was wondering if there was anyone who has obtained a loan at my age or with a part time job? I will have enough money for a pretty sizable down payment, especially with my partner involved, but I know banks care more about your income and collateral when you're inexperienced. Does anyone have specific advice for me? Should I just start calling banks to see what their criteria are, and if so, what questions should I ask?

Hi @David Cappel,

Welcome to the small ABQ forum! I saw your post in my discussion and would like to connect and possibly meet up.

@Brock Wiberg I plan on sticking around so I can get my foot in the door. I'm a BS in ME right now and do not plan on going to graduate school.

@Dawn Brenengen It was a pretty specific question, so no worries haha.

@Basit Siddiqi Thank you for clarifying that for me! 

@Dawn Brenengen I have another question, not sure if you can answer it or not. 

Say one person has a capital asset they are considering to sell within a trust. That individual is not an accredited investor, but one of the beneficiaries is. Since the person selling the asset isn't an accredited investor, they cannot differ capital gains through an opportunity zone. If that person where to "gift" the asset to the accredited beneficiary so they could put the money in an O-zone, what would be the tax implications of that? I'm aware that if a person gifts an asset, the beneficiary has to pay capital gains on the asset, but if they were to put it into an O-zone, those taxes would be deferred right? 

Thank you @Dawn Brenengen! That is what I assumed, but wanted to double check with someone reputable!

Hi BP community,

Does gifting money reduce your taxable income? I know the limit is $15,000 for tax free gift, but does it reduce the gifter's income for that year? Say you make $90,000 and you want to find someway to drop into the lower tax bracket. If you gift $10,000 to a family member, does that lower you or does it have to be a gift to a charitable organization?

Let me know if you have any idea!

Thanks