All Forum Posts by: Lennon Lee

Are you asking about the property’s cap rate or the market cap rate? They are two dofferent things.

The cap rate of the market (or sub-market) is determined by recent sales price of comparable properties and their NOIs. The local brokers are the best source for this info.

The property's cap rate you can simply calculate it if you have the T12 financials. The seller should provide you this information. Divide the T12's NOI by the asking price.

Generally, you will not want to pay a price that results on a lower cap rate than that of the market. (For obvious reasons). 

I hope this helps. Feel free to DM me if you’d like to chat further.

@Joshua Schoer there is no fee for this one. 

There is a meetup group called The Multifamily Investing Club but this particular meetup is not created as an event on the meetup.com page.

Come join us at The Multifamily Investing Club: JAX Pop-up Meetup for an amazing night of networking and knowledge sharing!

Our sponsor, BLD Capital Group, has recently been awarded a 138-unit deal in the Jacksonville market and the partners and principals will be in town to share their experience and the plans for future acquisitions in Florida. 

We'll be meeting at the awesome South Kitchen & Spirits for drinks and dinner on Monday November 26th 7:00 pm.

Come ready to learn, build relationships, and share some knowledge with other multifamily investors and industry pros. We'll be having some inspiring conversations and interesting debates about different investing strategies and the state of the multifamily market.

Come join us at The Multifamily Investing Club: JAX Pop-up Meetup for an amazing night of networking and knowledge sharing!

Our sponsor, BLD Capital Group, has recently been awarded a 138-unit deal in the Jacksonville market and the partners and principals will be in town to share their experience and the plans for future acquisitions in Florida. 

We'll be meeting at the awesome South Kitchen & Spirits for drinks and dinner on Monday November 26th 7:00 pm.

Come ready to learn, build relationships, and share some knowledge with other multifamily investors and industry pros. We'll be having some inspiring conversations and interesting debates about different investing strategies and the state of the multifamily market.

Come join us at The Multifamily Investing Club: December 2018 Meetup for an amazing night of networking and knowledge sharing!

Get your tickets here: https://bit.ly/2A8WLhS

This month our guest speaker will be Tal Frydman, Senior Director at Berkadia's Investment Sales arm. With 20 years of experience in the multifamily investment sales arena, Tal leads the South Florida Multifamily Brokerage team which has facilitated more than $1 Billion in apartment transactions.

As always we'll be meeting at the amazing spaces of Wework Security Building in Downtown Miami on Tuesday December 4th at 6:00 pm

Get your tickets here: https://bit.ly/2A8WLhS

Come ready to learn, build relationships, and share some knowledge with other multifamily investors and industry pros. We'll be having some inspiring conversations over a few cold beers and some hors d'oeuvre.

The nearest parking garage is College Station Garage and it's only $5 after 6 PM. There is also public parking on the streets nearby.

Get your tickets here: https://bit.ly/2A8WLhS

TICKETS WILL BE $20 AT THE DOOR. (ONLY CASH)

You should check out, via your mortgage broker, the Fannie and/or Freddie Small Balance loans. 

Here is a link to the Freddie SBL: https://mf.freddiemac.com/docs/product/small_balance_loan.pdf

I think those might be products that are in line with the product you want to invest in.

I made the jump from a small residential portfolio of condos and single family homes into large multifamily properties. 

I started investing as a passive investor with an experienced group/operator through the syndication model where my participation was totally passive but allowed me to start my education in  the space beyond podcasts and books.

I later started building partnerships with other operators and brought value to the relationship in different ways in order to earn my seat on the table (i.e. the active side of the deals). That allowed me to build credibility and relationships in the industry as well as creating a network of other passive investors that, just like me,  find value in having a good network of multifamily operators with whom to place our capital with.

After that process I then moved into building partnerships with like-minded groups to venture into the direct acquisition of large apartment complexes and effectively become an operator in the multifamily space.

That is my experience moving into multifamily and by no means I'd say it is the best way to do it. What I can say is that by having a patient approach I was able to gradually earn my badges and build the confidence to now pursue 100+ unit apartment acquisitions.

Very interesting Neal. Thanks for providing your insights on this topic. 

@Juan Vargas numbers are very fair. I would lean more towards using $300 as a starting point and then adjust from there.

For example, the latest quote we got for a 138-unit property that we are looking to purchase in Florida (not flood zone) was $350/unit.

You have gotten some great advice here Charlie. From Zillow to broker and PMs relationship building as well as having a boots on the ground person.

All that works just fine and you definitely don't have to know the market the way you know the market you live in. That is a difficult thing to achieve and if you want to wait until you have that type of market knowledge you might end up not investing out of state.

My two cents would be the following: make it a point to schedule regular visits to your target market. Again, all the other strategies work just fine but nothing will provide market knowledge like actually visiting the market often a few days at a time. Every market has very particular dynamics that no report nor broker conversation will be able to portray. 

Driving the streets, talking to locals, eating/sitting at a local cafe, and personally getting a feel for the different areas will allow you to understand those dynamics and therefore allow you have an edge over other "out-of-state" investors that just rely on those reports and long-distance phone conversations.