All Forum Posts by: Justin Moy

All properties will be marketed as having below market rents. I don't think I've ever seen a broker or owner claiming that possibility wasn't there. 

If rents are truly below market then it usually comes down to: 

Long term tenants which most owners are ok renewing for lower rates

Not wanting to fix the place up to bring units to market, either interior renovations or exterior renovations. Renovating also incurs risk so if the property is running smoothly there may not be a lot of incentive to shake things up. 

Ineffective management or remote management. Not keeping up with what is truly market rent. 

Holding high occupancy to get ready for sale. Really want that occupancy to stay at least 90% for 90 days during the sale so a lot of owners will sacrifice rental increases for higher occupancy. 

There's a saying I really like in the REI space..everybody goes from single family to commercial. Nobody goes from commercial to single family.

With your experience I'd think you could do great in either, but you will have a big advantage in the asset management portion of the investment which is huge. 

It will likely come down to cash on hand. If you want to do things on your own then you'll have to look at your own cash position and qualifications for loans. 

If you're looking for partners you can focus on looking for cash partners that will really open up your options for commercial deals. 

I'd give them both the same rate unless there is a reason one would be different. These can be lease terms like charging a bit more for a month to month term or charging more for a more desirable unit. Maybe one unit that has a better view or easier access to an amenity...etc. 

Yes I would ask for all of those. In my experience most have provided early on but maybe not. Anything they don't provide I'd for sure get and review before due diligence is over 

I'd have a few property managers look over these with you. As mentioned, I don't see vacancy and bad debt (missed payments) on here which calls into question everything else. 

I'd verify with bank statements the income as well

As mentioned a few times, whether you want to be active or passive is the first question to ask. 

Active ownership takes time, patience, capital, knowledge, and comfortability with more liability. The returns are you have control and depending on the investment type you're pursuing your returns can be higher. 

For passive options your time will spent mostly doing due diligence before investing into the deal. Then after you invest it's out of your hands. That's a pro and a con to people. 

You can also do both and dedicate some capital to multiple strategies. I'll DM you about my experience with some of those sponsors as well

@Zaid Mahmood I'm not in those areas but consider myself pretty experienced in the LP space. Host a podcast all about it and some group events in my local area too. I'll DM you and we can connect

A broker could help especially considering you're new. On the other hand, a broker is also incentivized by you buying the property so their opinions of things could be a little biased. 

If I were you I'd likely consider partnering with a more experienced investor instead of bringing on a broker. 

But, if you choose to buy on your own then yes you can ask for financials directly from the seller. I'd ask for their trailing 12 month income statements (a T12) and a current rent roll to start your analysis

Yes you would honor their leases until they expire, then you can adjust their lease or end the lease so you can renovate the property. 

We tend to push rents $50 until we see the traffic on our listings drop. Once they drop to below our required lead flow to rent out the units when we want we'll drop it by $25. 

Keep experimenting until you find what works for the property. Look at what other complexes are charging and you should get a good feel of where to start off