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All Forum Posts by: Matt A.

Matt A. has started 8 posts and replied 133 times.

Do a little bit of digging before you get in bed with erentpayment... they absolutely imploded a year and a half ago leaving millions in small landlords funds "lost"! There is legal action against them from many.

It REALLY pays to know how your rent is being handled - meaning erent had several middlemen in the equation, and the blame-game started.

Cozy might take a week, however their back-end system is much better (albeit not nearly as functional as erent) from a "cooks in the kitchen" perspective. Ive personally switched to a full management system and have a direct setup with ACH and credit card capabilities - if your willing to pay a few bucks a month then you might look into Rentecdirect or buildium. While these are WAY more than simple rent collection, they are tools to effectively manage the entire business. Just something to consider.

Post: Just started but ready to quit .... please talk me out of it

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

Call it tuition... you will pay LOTS of tuition in this business. If your 'tuition' on this deal is only $800 your got off cheap!

Im looking at $64k tuition right now (albeit its for my kids freshman year in college).... In full disclosure, he is pondering the value as he has been investing for almost a year now - and REALLY likes the returns that his investment in Real Estate is generating.

Flip it to him! Seriously, If he wants to have a say, he needs to buy the place. Im not big on operational partners and am not advocating taking one on... but if the price is right there is always money to be made selling the place.....

Post: On the fence about the background check results

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

Its YOUR asset, and your trusting this person to not only pay for it, but to reasonably care for it. Ive has several "really nice" folks make it through the first round only to fall off the wagon when we start probing. Do what you wish but my take is... if your asking is sure as heck sounds like you dont want to trust your gut and reject (looking for someone else to validate so when this goes sideways you can say the "community" though it was a good decision).

There are thousands of prospects out there... be a little selective, your looking for ZERO problems long term - this just indicates to me that your prospect has learned to be a little slippery, and if YOU get into an issue with them you can rest assured they already have some "experience" with the system.

Post: Plumber fixed pipe leak But found non-compliance code

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

Is this a union town? would it be possible that the plumber is related to the town inspector? Not saying the two go hand-in-hand.... but I would have ONE plumber on my lost of folks never allowed to rent from me, enter my properties, or do any work for our company.

I think you might be in one of the geographies that actually have older housing stock than we do! Code "violations" are a daily occurance.... stuff as old as ours is NEVER up to current code.... it was at one point (probably 120 years ago when it was built), but surely not today.

Post: another duplex done quickly

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $112,000

Got another one under contract. Actually had 2 multi-family buildings verbally accepted, however the seller and the sellers agent were such jerks I walked away. It became obvious that they were not dealing in good faith and it was time to move on.... so "the deal of the decade" presented itself the very next morning! I had my team present the offer in the morning, dropping off a earnest deposit less than 24 hours later.

Good duplex that cash flows as-is (it will be much better soon as we own it, less than 4 blocks from others we own. Total rehab in just under 90 days, a couple weeks to get leased up with a couple of great tenants, and just re-fied out all in just over 4 months!

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

BRRRR

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

MLS - priced way under what it was worth

How did you finance this deal?

cash... closed it in 2 weeks

How did you add value to the deal?

complete rehab

What was the outcome?

fantastic appraisal (both buying then again 90ish days later for the re-fi)

Lessons learned? Challenges?

Contractors are challenging... especially when your half the globe away on vacation during a rehab.

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

Yup - great agent thats got our offer contingencies tee'd up and ready to go. Can get a written offer into a sellers hands in 60 minutes

Post: My deal finder / agent tells me my offers are too low

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

@Jan Kutrzeba - tough market in the Lehigh valley at the moment. You have to have a plan immediately of how your going to add value. The last two I bought in the valley, First was full price sight unseen (it got accepted)... We also negotiated a substantial credit due to deficiencies in the place... and I've had to put a few bucks into it as well. It does cash-flow nicely, but its been a challenge for the first several months.

I bought another building a week after closing on that one - vacant duplex that took a $65k rehab. We just refied out of that a few weeks ago... still have some skin in it, but well under 20%.  I negotiated a cash deal, 2 week close, and put up $10,000 earnest money to win that one... all in the living room while other investors were in the building!

At any rate, there are plenty for sale - most if not all are "full freight" retail pricing too. I've got a couple that Ill sell that way, and they still make LOTS of money (even with current interest rates)... however I have little inclination to do so. Your going to be extremely hard pressed to get acceptance of those kinds of discounts at the present time... still a sellers market from my perspective. 

Id steer you towards re-evaluating the strategy and what your ultimately trying to do. The other unwritten rule is many of the localities are getting fed-up with remote owners that simply squeeze cash out and bring in substandard tenants that cause decline in the neighborhoods. Its a real problem in several areas... I've also found a source of deals working to fix that - but again, its not easy. Ill be blunt, If I had a property listed for $140k and someone floated in an offer of $75k your not going to even get a response from me, than again sellers can afford to be arrogant at the moment. 

Post: Syndications Gone Wrong

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

@Ben Leybovich - great point you raise, from a clarification perspective. Several OM's that have been presented to me are really based on overly optimistic back-end projections. I've seen a couple that CURRENT numbers will barely cover the debt, let alone turn a projected profit till several quarters into the future, and that's if everything goes well! 


Im also generalizing a couple of the more well know pod-casters comments (specific to multifamily) that they are seeing a considerable uptick in deals that they are reviewing being 'overpaid", or at least the consideration of overpaying.

Lastly, in the smaller MF space Im hearing of folks that are buying based upon what they "think" the project will produce in the future... something that I simply wont do. I have no qualms or doubts on Brian's ability to analyze and/or close (in fact I don't believe I ever called that into question)... and I've done a couple small deals myself in the last 6 months, I KNOW we didn't overpay as they are generating NET CASHFLOWS of over $500 per door!

So from a clarity perspective - I can directly identify 4 OM's from first timers that Ive seen, none of which Id attempt to go after on my own (the returns are simply too thin, in tertiary markets that simply don't meet our criteria. I view several key factors that need to be met to move an opportunity forward, buy it right, get the correct financing (and have a realistic exit on said financing as well), have a significant upside to even get involved with it, and manage the thing correctly. While by no means an expert, I have built a solid business with small MF that's producing excellent returns. I haven't personally found anything worth making an offer on in the last 4 months myself - albeit when the "deal of the decade" comes along every week, we are well positioned to beat most of the competition to the punch.

In closing - let me say my thoughts, experiences, and opinions are mine alone. Im usually not in the habit of pontificating my expertise (in fact I like everyone else, am still learning THIS business). Im simply sharing a perspective that I see and have experienced. Take whatever is applicable and discard the rest.

Post: Syndications Gone Wrong

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

While I haven't seen one of these go badly on a personal level, I have been following several syndicators for the last 18-24 months, mainly learning as much as possible about the pitfalls. We have attended a few seminars/classes/events... whatever you want to call them, some good - many being nothing but a marketing pitch for someone's deal.

What I HAVE noticed, especially after sitting through many webinars about 'deals' (aka - a pitch for funds) is that many of these folks all say the right things... at least the things that the guru's teach, however they seem to have little experience or contingency for when something blows up. We have had several recent calls from various folks that essentially have zero experience or money, but are experts in how to invest MINE. When pressed for tough answers I've found many responses to be rather evasive or vague - a sure way to get a "dial tone" from me :-)

One in particular had gotten into a 'program' that was rather brilliant (at least from an outside perspective once you saw how the thing was actually structured)... essentially an internship that the intern PAYS the sponsor to learn the ropes, then go out and hustle your contacts for funds in exchange to be a GP - and sign a note! Seriously, after the syndicators office contacted me directly... then found out I personally knew one of their students I got "dropped like a rock" from any further contact. That sure as heck tells me a lot about how the business will be run when a problem arises. (and the head honcho is a VERY well known podcaster / syndicator too). After taking a few steps back and really looking at the cracks in the mortar on this one it became painfully obvious the "system" that both majority and minority GP's are utilizing.

While I wont mention names - I would suggest to be EXTREMELY careful on whom your actually taking advice from.  THere is a new expert popping up every day, a new podcast, a new guru building credibility (or attempting to) in subtle but dubious ways. We do look at what someone has done in the past - but we also employ our own countermeasures to sniff out the crap. I've caught a couple of these guys in what I would summarize as a bold-faced lie as well. when confronted I've never heard from them further either (wonder why).

All said, I do think that many good assets are going to come back to the market once times get tough... many newbies are simply over-paying, and using investors money to do so! as has been said before - caveat emptor 

Post: Existing Tenants/Leases - No Late Fee

Matt A.Posted
  • Investor
  • Charlotte, NC
  • Posts 135
  • Votes 124

@Jordon P. - Youre unfortunately at the mercy of the existing leases. From my experience (all my units ARE in PA, and I have had this situation myself) you need to concern yourself with a couple areas of the lease... 1) Does notice have to be posted? (meaning is there a waiver of notice clause in the lease?).  2) late fees - you already mentioned that.... NONE so it stays that way, and any other 'terms' that might benefit or encumber you.

IF the resident waived notice to post (that pesky "pay or quit" notice) you can head straight to the magistrates office. If there is no mention of it I would post notice immediately once rent is late. (check with your attorney on the time requirements actually IN the notice... 10 days rings a bell, however I am NOT an attorney, and personally I would have my management company do this for me). Soon as that period runs its course you can file for eviction. 

The bigger question I would ask - how much time is left on his lease, adn is it worth going through eviction? THAT is going to cost you in hard money - and possibly you getting the property torn up. If they know the landlord / tenant laws in PA they will surely drag this process out for a few months... and once they appeal to Common Pleas court your best to hire an attorney... this 'aint DIY court anymore (and that's where the charges begin to pile up).

Wile you might "win the battle" by getting your tenant out sooner, be prepared to spend some time & money getting the place ready for your next tenant. December, Jan, Feb,.... heck even Marc sucks for renting! I have a couple leases that come up in march - haven't had anyone opt NOT to renew as they simply don't want to move in the winter! Now that all said, If I had a unit that I wanted to rehab (and Ive got a couple of those myself at the moment), wanted to increase the NOI on the building, AND I had a tenant in that unit not paying... I wouldn't hesitate to accept nothing but rent in full, by the due date. (this is where electronic rent collection comes in handy - we can and will demand rent in full, especially once a tenant has been late a couple times - Ive got one now in fact) and prepare for a winter rehab. April is a GREAT time to start the rental season here and having 60 days to gut a place, put new into the unit and raise revenues.... well that's exactly my strategy - I just dont like tossing someone to the streets to do it however.

Just think about the potential hard / soft costs of eviction... you can probably kiss any judgement goodby. You'll spend court fees, lost time (and time is money), and loose hair (look at my Bio picture.... Or ANY Presidents picture when the came into and left office!), and generally feel crappy. Its an individual decision,