All Forum Posts by: Matt Calnan

 Throwing around numbers for examples? This is a quote from me above:

"I have 3 multifamily deals on the go right now, all of which are seller-financed for the entire down payment. It's 560 doors in total."

Don't think that realtors are going to understand seller financing. What everyone is trying to say, is that you can't just base your beliefs on what a couple of people say. These things work. A lot of people get seller financing. A lot of people only do deals when they get seller financing. But that doesn't mean that it should happen on their first attempt. The first deal might have taken 100 offers. 1000 offer. Who knows. Someone else said above, it's about relationships. You have to find the right person, then build the relationship with them. 

People aren't going to pick that out in the description. And I think it would turn a lot of people away by having that in the description. I wouldn't normally use a TV in a vacation property, but I would think it was crazy to not have them available. And I would also stay away from having them "available upon request". That might be even weirder than just not having TVs in the first place haha!

 That's a VERY good point. To be honest, I'm not sure why someone would come on a site like this if they already know so much more than the rest of the members. Good point Dan, good point. I listened to that book as an audiobook. I thought there were words in it, but maybe I was just listening to white noise for 10 hours. I'll have to go double-check! haha.

I would ALWAYS go LVP. The only carpet I put in units is commercial carpet, but it's more expensive than LVP. And you can get good underlay for cheap with LVP that will dampen the sound for you. I'd rather have the durability of LVP or commercial carpet and hear about a noise complaint every so often then to replace crappy carpet every 3 years!

One strategy I've found that works well in the past is driving around, finding a property that is clearly a rental (a bit rundown, lawn not taken care of, etc.), then pulling the title for the properties that I find. Often on the other end of the conversation is a landlord who is not happy with dealing with tenants anymore and has "given up" on driving by and making sure the property is taken care of. 

It certainly doesn't work all the time, but usually 15-20% of the time I get somewhere in terms of a discussion. I usually do that with larger multifamily properties, but it would work even better with smaller ones I would think!

Hey @Paul O'Connor

Congrats on the opportunity first of all. There are some really good due diligence lists out there that you could tap into. They will be REALLY comprehensive and you likely won't have to follow everything in there, but I always think it's rather to start with too much and widdle it down. Here is a high level example:

https://northeastpcg.com/blog/...

To answer your questions above specifically:
1) Yes, RO systems exist for well water. There should be a lot of companies in your area that offer this service. Have someone come out and take a look, it should be relatively inexpensive to complete. 

2) This is up to you and your leases. Usually on commercial properties you have CAM (common area maintenance) expenses which are fully paid proportionately by the tenants (based on square footage). However, mixed with multifamily you will likely want to allocate some of this expense either as a fee to the residential tenants, or more likely, an expense to the building/company itself. 

3) It depends on how your utilities are set up - do you have separate electric/water/gas meters? If so, then I always like to have tenants pay for utilities. What is typically more common (not always though) in multifamily is that some utilities will be included because they won't be separately metered. However, I would always ensure the commercial tenants are paying for their utilities. If it isn't separately metered for them, come up with some type of distribution of charges that you have in the lease. One important note - the common area utilities can be charged back to the commercial tenants through the CAM, though again you may need to pay a portion of these CAM expenses for the residential tenants. 

4) I have never seen a municipality that didn't have a fee associated with sewage. It should be easy enough to figure out though, just call the municipality and they'll be able to answer that for you.

5) Again, usually there is a fee for this, or it is included in your property taxes. But when dealing with commercial/multifamily property, you almost always have to have separate waste disposal. Again, a call to the municipality will quickly clear that up for you.

For due diligence, like I said there are some really comprehensive documents out there. But at a high level, I want to know property taxes, insurance, and utilities historically (and most importantly, VERIFY THESE YOURSELF). Historic vacancy rates, rental rates (are they increasing, staying the same, etc.), and issues with tenants. It's also really important to know the maintenance status of the building. Has it been well maintained, or are the owners trying to pinch pennies everywhere - which will now become your problem? What kind of plumbing and electrical exists? How is the roof? Is it wood building, brick, or concrete? What does the boiler/hot water/furnace look like? Have they been maintained? Do they need to be replaced relatively soon? 

Usually, on this type of property, you're going to need an appraisal and an inspection. But even if those aren't required, I'd always recommend getting the inspection done. It can help you stay away from a bad deal. Good luck with everything! 

 Agreed with this. Great to buy with!

 It would be worth looking at vacant lots/plots of land in the area to see what they are selling for. If you can break that down /acre or psf, then you can subtract that value off the psf cost of your house. Compare that to other psf values of similar properties like you've done, taking into account their land value as well. 

 I'm curious as to how this ended up for you. Obviously, it all comes down to your risk level. I always think about the potential upside vs. the potential downside. I'd rather secure the funds sooner (especially if it is above asking - you're getting more than you initially thought) and get moving with new projects and never look back. 

 I would agree, number 2 gives so much more flexibility. And yes it has a higher interest rate as people have pointed out, but with no principal payments required, the cash flow will be much stronger than traditional term debt.