All Forum Posts by: Kyle Robertson

Investment Info:

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

Purchase price: $3,000,000
Cash invested: $640,000

🏡 Property Shuffle! 🏠

✅ I sold a 16 plex
✅ Refinanced an 18 plex
✅ Bought a 60 plex
✅ Scored a cheap $200k LoC
✅ Total cash out of pocket: $40k

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

Buy and hold Multifamily is my jam!

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

Local MLS.
Purchase price: $2.8mm
Financing: FCU
- 20% down
- 3.59% (promotional rate)
- 5/25
- Appraisal and loan origination fee waived on promotion through the FCU
Financing: FCU
- 20% down
- 3.59% (promotional rate)
- 5/25
- Appraisal and loan origination fee waived on promotion through the FCU
Inspections: 15 business days
Closing: 60 days
Seller countered me at $3.185mm, and I countered back at $3.0mm. Seller accepted.

How did you add value to the deal?

Rents averaged $550/unit. We have raised them as units began turning over to $725.

What was the outcome?

Cash flowing like a mad man!

Lessons learned? Challenges?

1. Build a solid network of good lenders, and stay in touch with them (while being respectful of their time, of course).
2. Inspections inspections inspections
3. Be creative with funding CapEx needs
4. Underwrite the deal 100 times throughout the process when something new is found (unexpected repair, higher than expected insurance quote, etc)
5. When buying a deal, be thinking about how this one will help you buy the next one.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes. Craig Melton with ERA Doty, Jonesboro Arkansas. Look him up!

My best deal so far was with a bank that was local to the 12-plex I was buying. It was my very first commercial loan and without any negotiations they gave me a 25 year amortization with 15% down and a 5 year balloon. Pretty awesome deal! However when we bought the next apartment (18 units) they wouldn’t even come close to that again. 20% down, 20 year amort, and a 5 year balloon. Still couldn’t find anyone else to beat that so we went with them anyway.

@Ujwal Velagapudi really well said. I feel the same as you, I just haven’t found the courage to pull the trigger like you did. Thanks for the inspiration.

@Ben I. Thanks for your insight and the kind words. Problem with my current W2 (Lieutenant with a FD) it will be filled as soon as I leave, so going back won’t be an option. I’m looking for a Plan B just in case this solo venture doesn’t work, preferably in real estate as a property manager company owner. We shall see!

@Brian Adams Thanks Brian, it’s interesting you found your way to my post because I read through a lot of yours a few months back. Next up on my journey through real estate education is large apartment syndications. You mentioned in your thread about Dave Lindahl... his book on repositioning apartment complexes is my bible (Multi Family Millions). He’s a great author, offers very little unnecessary fluff and gives very actionable suggestions.

I'm currently reading about the art of raising money. I have never partnered or JV'd with anyone, so all 50 of my doors were paid for out of our own bank account. Now that we are bumping up against our reserves that we swore we would never surpass, it's time to go back to school (self education that is). I am very driven and confident we will make a successful venture into the world of syndications, I just want to make sure I'm an "expert" before becoming a steward of other people's money. Thank you for the inspiration. I'm sure there is a ton I could learn from you!

@Kevin M. Thanks for sharing. I’m eyeballing a property management company as my post-retirement gig. I know a lady who manages around 200 units who is set to retire and I’ve already made an offer. That would be my slam dunk scenario. She said she has another year and she’s ready to pull the trigger.

@Allison Leung like many have said the app is clunky. I would add some red alert bubbles when someone gets an alert or message AFTER opening the app. Not complaining because the content is still great!

@Shawn Ackerman that’s exactly what I’m asking for! :)

@Shawn Ackerman

We have used all conventional/commercial loans with our own capital up to this point. We show a fair number of years with rental income already so I think we’d be okay there, however I’m ready to start getting into creative financing deals using OPM. Commercial financing doesn’t care nearly as much about a W2 job, and we focus primarily on apartment buildings.

@Nick Robinson

I don't get as technical as everyone else has said so far. I keep a balance of nine months worth of all expenses, including utilities, mortgage, 10% each for vacancy/repairs/CapEx, etc. This means if 100% of my tenants (I have 50 doors) quit paying anything and everything then I can still stay afloat for 9 months. The likelihood of 50 people in different cities suddenly deciding at the same time to quit paying everything all at once is virtually zero, but stranger things have happened so I stay prepared.

I have one savings and one checking account for all of my properties. Since I still have a W2 job I let my investments live a life independent of my own personal life, which I fund solely with W2 income. Just my method which has worked well in good times and bad. 👍🏻