All Forum Posts by: Justin Knapp

I personally haven't seen any hard and fast rules in my time. If you're facing a property with erratic utility pricing, typically that's a prior management lapse or deferred maintenance item that's gone unnoticed (or is trying to be slipped past the potential buyer); you can always save that for your negotiation. If the seller won't investigate/explain, there's the option of setting expense caps with the seller for the first year or two (where you set up an escrow account and he will pay for any amounts above an agreed upon cap - note that this wouldn't include water breaks or such that would fall under the watch of new management). If current management is paying the utilities and you plan to continue paying them, you can always include a section in new leases holding residents responsible for costs over a certain cap (could be based on average totals received from the utility companies).

More than anything investment size depends on the investor and their specific experience/knowledge. If you're just starting out with minimal exposure to real estate, property management, and reading financials, going big will most likely set you up for a bad situation which you'll need to rely on someone else to help you solve. In that case, you have to hope you're getting good advice from someone who has your best interest at heart. Granted, going small is more difficult from a time investment (per unit) but a lot easier to get into with smaller potential downside. If you can absorb a potential large loss and are willing to put more money (yours or an investors who's also willing to take on a similar risk profile) on the line, then you can reevaluate.

The draw of the larger investments is obviously the beefed up income statement, but ignoring the proportional increase in risk (only magnified by the level of leverage you place on the property) will set you up for a hard lesson.

Hi everyone,

I've just discovered BiggerPockets and love the opportunity it holds. I've been lucky enough to have been in the real estate industry for the majority of my working life. I stumbled into property management and just got hooked. I feel like I've done a little bit of everything; multifamily, commercial, mobile homes, development, construction management, asset management, as well as acquisitions & dispositions. I've worked in 5 person organizations and now am in a $2B+ private firm. I'm at point in my life where I'm looking to get started on my own, specifically with multifamily assets on a 5-7 year time horizon, and find fellow investors /partners to work with to leverage my experience.

Thanks, best wishes, and I look forward to talking to everyone,

Justin