All Forum Posts by: Levi T.

I was offered a portfolio of 16 townhouses in NOVA for about 65k a pop. The properties in question are in a hard hit area, that everyone says will gentrify, but it never does after two decades of people saying that. I had just wrapped up another deal, so I passed because I was getting nicer deals for about the same price in other areas.. This was maybe 4 or 5 years ago. Between that time and now, the city bulldozed some buildings, built two parks, then tossed in a 4 lane highway, and 3 new apartment complexes got build next door, along with a new housing development and a few motels... They sell for 185k a pop all day long, and rent for $1,650 faster than you can list them.

 The general rule is that contract terms do not survive the termination of the contract unless it is expressly intended by the parties. So unless there is a clause within the contract that gives them this right, I find it highly unlikely enforceable. *not legal advice

Tenacity I suppose. Why not just send a few hundred thousand letters to people asking if they want to sell their house. Someone will call... Especially if you do it every month for 10 years. They will know and curse your name, but someone, somewhere, will sell you their property eventually.. Most call it driving for dollars, I just took it a step further at the right time, maybe a little too far, but I wanted hundreds, not dozens of deals. Bigger problem will become how to finance it... You upset the apple cart, and the banks will lock you out as they don't like people moving that fast. If you figure that out, then the bank will just do the deal making for you, and get their clients to sell you their portfolios long before it would ever go to market, because they get the loan org fees. Basically I pulled a BlackRock asset management bootstrap version, at the same time they where doing it... Two weeks ago I was in Norfolk trying to buy 105 townhouse portfolio off of some guy, did't workout.. Month before that I was sending around 10,000 letters to targeted properties per week in Texas, chipping away at deals. Now I'm packing my bags to fly to Oklahoma City to put eyes on about 200 units over multiple multi family deals I put offers on. If everything goes as planned, I'll be the new owner of said units in a few short months, and keep on keeping on with the BRRR. If you try hard enough, anything is possible!

I live in Tucson in the winter, DC when I feel like it, and Nice France the rest of the time.. I own hundreds of townhouses in the DC region, as well as multi family. I cut my teeth and built my fortune on the DC market. If you go to Del Ray North, you can find deals just walking down the street. Seen one the other day off Aspen St with a tree growing out of the gutter. 

It's a tough market, always has been, and now we are in a record breaking supply issue nationally.. so yeah. BUT, BRRR still works just fine.. You are competing with folks who have decades of building networks and methods to gain access to what you want, long before it's even in the market. I bought 5 deals in December easily for 60c or less on the dollar. Then things really pumped, and I moved onto other types of deals... 1% of re agents control 80% of the market. If your going to use agents, you have to find those 1% agents, and pay them better than anyone else. You can quit, and let others win, or you can become the winner. The current winners want everyone to quit.

That is what I am doing, getting more boots on the ground, talking to locals, and experts in the region. Same reason I started this thread. The more one knows, the better IMO. I've already gone over all the T12 to 36 on all these properties, that make a combined 200 units, and already built out my own proforma based off of that. These are solid B/C properties, with 1-3br. All blue blue collar tenants, and I don't expect that to change. No war zones are far as I can tell. I believe the average cap will come in around 6.12% after closing. We even added in extra to bring vacancy rates to 10% for safety. I believe after a few million added, we can get curb appeal improved, and each unit cleaned up a little over the next 36 months, plus install a real management team vs owners operators, thus I estimate we can turn that around to be a 9%. Just trying to connect with folks in the area. I'll be flying in next week to tour everything.

I am looking at diving into the Oklahoma City market, and hopefully owning a few thousand units within the next year or two. I would love to talk to some people who know that region well. Real well. Looking around, it looks like 8% cap is the norm, so what do you consider good, or amazing deal in the value add space? And where and what should one stay away from in the region? I would love to jump on a call if anyone is interested.

 Same here, we do the unfinished Project Source cabinets from Lowe’s as well. There is a lot to be said about about painting cabinets, MDF board, and new hardware. You can refinish cabinets for a few decades with little or no cost, and still compete with units that have granite countertops. A little bit of glossy white paint, and hardware goes a long ways, even in high end markets like Washington DC. 

Normally under state law it transfers to the new owner on title. They are bound to the lease terms till the end of the term, unless there is a provision in the lease to allow them to terminate. It’s not required, but you will normally do an assignment of lease agreements at closing, it may include hold harmless clauses between you and the new landlord. Don’t worry, you’ll be fine!

I expect the market to keep marching forward, and at best, level off into a cooling period, but over all the demand vs supply level will continue to support the pricing moving toward. That’s been the biggest driver to date. Now that rates are rebounding, we are already starting to see this. I would no expect any corrections anytime soon, the data just does not support in regionally or nationally.