All Forum Posts by: Liam Delumpa

I'm looking to transition from multifamily into non-residential commercial real estate and am looking for recommendations on books or any online resources to learn more about the space. As of now, I am most interested in multi-tenant retail and suburban office. But I have realized that with more education, my interests my change. I am trying to find resources to absorb more information around non-residential transactions, due diligence, leasing strategies to add value, etc.

Thanks!

2 Votes

Quote from @Jim Pellerin:

You can do your own virtual underwriting by using the following "guess" method:

1. What's the asking price?

2. What are the typical rents for the area? Determine the gross rents for the property

3. Estimate the expenses based on the age and condition of the property. Use 40% to 60% of gross rents.

4. Calculate the estimated NOI. Gross rents minus estimated expenses.

5. Use the NOI and asking price to calculate the estimated Cap Rate.

6. If the Cap Rate is close to the market Cap Rate for the area, and you are ok with it, ask for the T12s and RR and all information about the property.

But I wouldn't worry about asking for detailed financials all the time. There shouldn't be that many coming your way.

@Jim Pellerin Thanks for the input! That is the exact kind of back-of-the-napkin formula I was looking for. In fact, most listings provide the current NOI, so with your strategy I could even solve for ballpark value-add potential!

0 Votes

Hello BP!

I am currently building out my funnel of leads for multifamily properties in my market. I understand the basics of underwriting, but I am curious how you screen deals and narrow down leads to a subset of properties worth doing full underwriting for. Is there any tips for determining if something will pencil out before going through the hassle of getting T12 financials from the broker/seller? I want to get my underwriting reps in, but don't necessarily want to intrude or waste the time of brokers to get full financials for every deal I'd like to practice underwriting. Any suggestions?

0 Votes

Quote from @Joel Allen:

@Liam Delumpa

I have out-of-state properties, but all are single-family homes that my family and I lived in for a few years and then turned into a rental when the military sent us to a new duty station. Because of that, we have a 'hybrid' approach that we use for managing those properties.

We hire a leasing agent to manage all the items up until the point the tenant moves in (photographing the home, listing the home for rent on the MLS, coordinating showings, accepting applications, screening tenants, accepting security deposit, etc). On the tenant's move-in date, the leasing agent meets the tenant at the property, provides them with the keys and a welcome package that we provide, reviews the lease with the tenant, and conducts a walk-through inspection with the tenant.

As soon as that walk-through inspection is complete, the leasing agent officially hands over management to us and we are self-managing for the remainder of the tenant's occupancy. Since we have previously lived in the homes/areas for 2+ years each, we have built a trusted group of contractors (plumbers, HVAC, electricians, etc) at each location that I can call whenever a maintenance issue needs to be addressed.

This 'hybrid' approach allows us to have the necessary boots on the ground during initial tenant on-boarding & exit. We pay the leasing agent a one-time leasing fee once the tenant is placed, and it eliminates the ~10% monthly property management fee.

Thanks for the insight, @Joel Allen. I am planning on doing a similar approach. Hiring out the tenant placement, then picking up the property management from there.

0 Votes

Cincinnati, Ohio

Hi BP Community!

I am an investor based in California and I'm in the process of offering on small multi-family properties in Cincinnati. I was originally going to hire property management, but for a number of reasons I've decided that I will self manage these properties from out-of-state.

I'm looking to connect with other investors who are landlording from out of state. I'm interested in sharing goals/systems/stories and most of all, to just connect with like minded investors who are tackling the same issues who'd like to chat.

Looking forward to hearing from you all!

1 Vote

Cincinnati, Ohio

Hey all,

I am planning on BRRRing a few properties this year and would like to get one under contract within the next month. I am looking for investor-friendly contractors in the greater Cincinnati area. Any referrals would be greatly appreciated!

3 Votes

Cincinnati, Ohio

Quote from @Timothy Hero:

Value: $350k

Debt: $274k

Loan size based on 75% LTV: $262.5k

Closing cost: $6,500 (2.5% of the loan amount)

Escrow: 12 months (depending on the lender)

Cashing out is not an option. In fact, expect to bring $18k to the closing table.

There's lenders that'll do 80% LTV, but you'll still need to bring like $5k to the table.

Curious, where did you get the 18k from?

0 Votes

Colorado Springs, Colorado

Thanks @Jayson Cain!

0 Votes

If you are using hard money for the initial purchase of a BRRR, are folks typically using the same lender that you would use to refinance once rehabbed? Or is it better to seek out a specific hard money lender for the purchase and have a pre-approval ready for the refinance with a different lender?

1 Vote

All Forum Posts by: Liam Delumpa

Liam Delumpa has started 8 posts and replied 15 times.

Post: What are the best resources to learn about non-residential commercial real estate?

Post: What are the best resources to learn about non-residential commercial real estate?

Post: Screening Multifamily deals

Post: Screening Multifamily deals

Post: Looking to connect with landlords who manage from out-of-state

Post: Looking to connect with landlords who manage from out-of-state

Post: Looking for Cincinnati contractor

Post: What LTV % Needed For Cash-Out?

Post: Using the same lender for hard money purchase and for refinance

Post: Using the same lender for hard money purchase and for refinance