All Forum Posts by: Justin Knapp

@Account Closed  - take a look at some CCIM courses. There are a few places online you can find their older class books for cheap. Solid information and no fluff.

@Account Closed  , few questions - how many units/buildings/techs do you have? Are any of them dedicated to specific buildings? How close are the properties to one another? Typically when preparing for make readies they're on your radar ahead of time so you can schedule a few weeks to a month+ out (assuming tenant has given proper notice or the eviction process has a reasonably expected end date), set up outside vendors, etc. Tending to any emergency/water issue is high on the priority list and needs quick intervention to prevent long term/expensive issues and fit in well around the scheduled turns and regular unit maintenance (can be done anywhere from quarterly to annually and announced 1+ weeks out - checking for leaks, fire alarms, extinguishers, health/safety issues, windows, cleanliness, undocumented pets, etc).

A lot of this will depend on how many techs you have, how well the tenants are trained about telling you when issues arrive, and how often you inspect the units to get ahead of the issues before they become a huge headache.

Justin

@Tony C.  - are you referring to certificates of occupancy? If so these are typically tied to the units, not the tenants and would also be on file at the city to confirm. If they don't have them on file it would have been an issue that would have been addressed at tax time as well.

Justin

Thanks @Joel Owens , definitely makes sense and I agree with the insight of brokers. I'm also referring to using market reports to follow the trends when looking into new markets and see how the current performance stacks up to other time periods and other areas of the country.

-Justin

Hi @Anita Oakley ,

I definitely agree with Joel on the points of multiple SFH's being more of a headache to manage (and often more expensive per door). The upside, however, is that if you're in an area where neighborhood quality changes within very small areas covering multiple areas somewhat diffuses your risk. That, however, has to be weighed against the additional cost and time.

In regards to the development, Joel also hit the nail on the head with being able to control the development and final product. When larger companies convert, they typically create an HOA and control all of the seats until they sell a certain % of units and then slowly transition the control/management over to the owners. This way they can be in charge of the look to ensure the future buyers (or renters if they can't sell) don't adversely affect their efforts). If you're renting, this isn't really an issue for you but still something that you will want to keep an eye on in the market (as you would if you owned an apartment complex anywhere).

Finally, surprisingly a lot of people are willing to buy in a owner/renter mixed area. Homes like this are typically less expensive than all SFH neighborhoods which open up them up to a larger pool of owners.

Justin 

Hi everyone,

I was curious how everyone is going about getting their market information, aside from the obvious driving/walking of neighborhoods and talking to a Realtor. I'm big into following market trends to stay on top of what's coming down the road and knowing the market from both a macro and micro perspective. There are a bunch of sources I use to cross reference each other (AxioMetrics, REIS, Real Capital Analytics, CB, etc.) but was curious to what else is out there to review. I think the previously mentioned sources are solid, but only give a sliver of what I'd like to know without paying an arm and a leg. 

-Justin

Given your experience, I'd consider not going big to start. That might mean finding a partner with experience to hedge your risk, purchasing a small complex, or holding off until you can get some experience. As you're considering putting your entire savings into this I wouldn't rush in if you have no experience. There are plenty of people/ groups (on BP and not) who have ample experience and not enough cash. At the very least, I'd pick their brain. In a market where solid deals are getting harder to find, you want to make sure you're not getting into the game at the wrong time and paying too much because you didn't know the right questions to ask.

Please post the details when you've had a chance to review, I'd love to see what you've potentially got and give some thoughts.

I agree with @Chris Winterhalter in terms of proper insurance being worth it in this situation. I would ask, however, how much does this premium affect your profitability and returns compared to your original underwriting?

Are you calculating the value of the contract, not including the leasing bonus, into your offer price (i.e. as additional income)? Also, have you spoken to the vendor to clarify if they reduced the monthly contract payout based on including an upfront payment (this would be my assumption)? If so, then you've got an under market contract and reason for push back. If, as a new owner, you signed a deal with this vendor and the terms would have been more favorable to you without the upfront fee then I would be using that as a negotiation point.