All Forum Posts by: Account Closed

@Mike Carr Thanks! I probably looked at over a hundred leads over the 11 month period. I then put a LOI on 5 of them. I then got under contract with 3 of them. And then finally ended with 1 close. I actually documented the whole journey on my vlog on YouTube if you watch YouTube.

I thought I was a little crazy looking at so many deals and not getting anywhere. When I saw others buying houses pretty quickly, it was kind of discouraging but I knew that I could not close 54 SFH in that period so it paid off. Multifamily definitely takes longer. Its like the tortoise and hare story!

The guy who bought it for 650k might be thinking what you are. Hey I can turn this thing into a 60k NOI and then it would be 9% cap rate. I am not saying that is the smart thing but there are a lot of investors out there that think like that especially with interest rates where they are.

A question to ask yourself is that if he you had $650k, would this be the best deal that you could get in the market?  Put yourself in the other guys shoes and see what answer you come up with.  That will tell you if that guy was a fool or if this is where the market is at.

It depends on the size when you say multifamily.  If you are talking quads or less, than your brokers may have a point.  If you are talking about larger units, I think your brokers don't have access to these type of properties.  If you ask a multifamily broker the same question, they are going to give you a different answer.  Ask investors instead.

I would say the markets that make SFH rental dynamics attractive are similar to what makes MF attractive. Location, employment, population growth, new jobs, etc... Once you pick an area, then you can focus on whether you want SFH or MF. But I think the dynamics are similar since they are competing for the same rental base.

I personally looked at SFH first but when I realized how many I would need to buy in order to accomplish my goals, I couldn't physically close that many deals in a year. That's why I decided to do multifamily originally.

I am not an attorney so you may have to double check me.  I think there is a rule that if you are soliciting to the general public, you can only do so to accredited investors.  That's why all the websites are only looking for accredited.  It would probably be illegal to solicit sophisticated.

If you know a syndicator personally, I think they would be able to take your investment as a sophisticated.

Once again you can double check me with a lawyer but I think that is right.

@David Huynh  That's what I said a year ago!

@Brian Garrett Much appreciated!  

@Tom S.  Yes.  I had to use my own money on this one.  I originally planned on syndicating this with some outside investors.  I had most of the money raised.  Then when we started negotiating the deal, I was able to get seller financing which changed my plans.  I had to close fast and couldn't wait for syndication attorney to draw up documents and go through the formal fund raise process.  Since I had the cash, I decided to just pull the trigger.  I may let other investors into the deal after a year has passed for tax reasons.  I got a lot of upset investors so I need to find that 100 unit fast!  LOL!

@Mary B.  It was in great physical condition.  Total of 7 buildings.  4 were built in 1985.  3 were built in 2010.  The only issues were that the 4 older buildings are going to need a new roof at some point during my ownership and the parking lot needed to be repaired.  The owner gave me concessions for the roof and repaired the parking lot prior to close

Where do I begin???

Last year I joined Bigger Pockets and started my journey as a real estate investor.  I had no experience in real estate other than my personal house.  I had a very successful career.  Then my son was born premature and he needed a lot of care.  So I decided to leave my career and pursue real estate so I could have the flexibility to care for my boy.

I consumed everything about real estate.  Podcasts, book, youtube... everything.  Thanks Bigger Pockets!  I even became a real estate YouTube vlogger myself to document my journey after I quit my job.

11 months later I closed on the biggest deal that I couldn't possibly have ever imagined doing!  A 54 unit apartment complex in North Carolina for $4.4 MILLION.  I negotiated the deal so that I only had to put down 10% and the seller agreed to owner finance 90%.  The owner was willing to take $4 MILLION in seller financing from someone he never met and someone who had zero real estate experience.  I don't think he even checked my credit.  I would like to say that I am a pretty good negotiator but I am probably just "lucky".  My experience has been the more time you put into something and hustle, the chances of you hitting that lucky deal increases.

I am in the second full month owning the property and I feel confident that I am going to hit the numbers that I modeled. I underwrote the deal at a 25% IRR which is a crazy return. The other fact is that my boy is very healthy now so everything worked out. My next goal for 2018 is to acquire 100+ units. The crazy thing is I got another deal where the seller was willing to seller finance a $10 MILLION deal. The numbers didn't work for me on this one so I am still searching.

The moral of the story is that it is totally possible to do this real estate thing in a big way.  You just have to have the right mentality and the develop the skills over time.  It's definitely a numbers game.  How much work are you willing to put in before your get first big deal?

Assuming your expenses are correct, you are making $47/month or $564/year.  That is a 2.8% cash on cash return based on your down payment and transaction costs.  That seems a little too low for me.  You can make about the same if you put your money into a 30 year treasury bond that has no risk.  You want to look for a property with more return.

Safe rule of thumb on raising rents is to see what other "like kind" properties are renting for in the vicinity.  If there are properties charging higher rents, what makes that property different from yours.  Calculate the cost of the renovation and see if the investment will pay off with the higher rents.  Also, don't forget amenities when comparing like properties.  You may be in a situation where if you have only 4 units, you might not be able to do much.

Hope this helps somewhat.