All Forum Posts by: Matt Moreland

Personally, I would lease it out myself and then hand it over to the PM.

I would prefer to have some face-to-face time with tenants to make sure they know I'm a person like them and not a faceless entity behind a PM company. If the tenant is more likely to take care of the property and continue leasing from me because of a relationship established at the beginning, I would do so on as many properties as possible.

Hi, Alex! Welcome to BP!

Speaking as a resident of Texas and former resident of Dallas, there are definitely deals available if you're willing to look for them. I'm not an expert of Florida so I'll refrain from speaking on it, however, Texas as a whole has lots of great cash flow opportunities across the state.

If you're looking at cash flowing SFH or possibly duplexes, I might suggest looking at some of the other markets in Texas or even honing in on one particular focus, like college housing. Duplexes around universities in College Station/Bryan, Austin, Lubbock, San Marcos, etc. are good for older college students who want to live off-campus and pay less than they would for a brand new apartment, and provides you with a steady stream of cash flows. Another benefit of student renters is that they'll oftentimes encourage younger friends to rent their place once they move out/graduate, which is really convenient when it comes time to get it leased.

Good luck on your investing journey!

Dan,

A typical property management fee could range anywhere from 4-10% of gross rents (larger properties get the better rates due to the economy of scale) in addition to a per door bookkeeping fee, let's say $5/door. Since the property manager is not on-site, it is not uncommon to see a small separate payroll fee. 

If the 15 unit property in question is collecting $7500 in rent each month, then a pretty common PM fee for said property would be in the ballpark of $825/month (($7500*.1)+($5*15) = $825). No matter how the numbers add up, 17% is a little steep unless the service is heads above the rest. 

I hope everything works out well for you, let me know if you have any questions!

Thank you, @Matt Motil! Looking forward to the future.

Thanks, @Angie Brooks! I'm mostly interested in Texas right now, but am definitely open to other states in the future.

Hi everyone! My name is Matt Moreland and I'm a commercial Realtor® out of Lubbock, Texas.

I've been working in the real estate industry for two years now--first as an investment analyst and now as a licensed agent focusing on multifamily assets. I've been interested in real estate since I was younger and realized that it was a way to avoid sitting still in a cubicle all day. I'm originally from Dallas, Texas, and moved to Lubbock to go to school at Texas Tech (wreck 'em Tech)! I joined BiggerPockets to see what other investors are doing in Texas, and to hopefully learn from and help others in any way I can. 

My goal is to build something bigger than myself that I can leave behind for my children and their children. During my lifetime, I would love to be able to take extended vacations and hunting trips without having to worry about using vacation days. So far I have acquired a couple smaller multifamily properties, and intend to scale up to larger properties this year.

When building, the site in question often requires grading in order to make sure the building surface is level and free of obstruction. During this process, everything is flattened out and any holes are filled in. Typically an engineer will come and run some tests on the ground to make sure it's the proper density, composition, etc. before any building takes place.

The site prep itself is everything after the grading and before anything is actually constructed. For example, if the soil was deemed not capable of supporting the weight of the project in question, part of site prep would be coming up with the proper topsoil composition and spreading that out. Once it's all spread out, it typically has to be compacted with rollers, rammers, etc. to make sure it is flat and solid.

Hope this helps! If you're curious about what all of this process looks like, there are some really helpful channels on youtube that show every step of the process along with descriptions of what's happening.

Brandon,

Some things to look for in an REI-friendly Realtor:

• Knows the market (more than just what is popular, they recognize trends and rent-growth opportunities)
• Understands how to analyze investments, and doesn't present deals that don't meet return requirements. Only having to double-check numbers on a few promising properties saves a lot of time. Let them run numbers for you and use your time to in other productive ways.
• Energetic: if they are an investor themselves, they're likely to have more drive and excitement when they find good deals that meet your criteria. If they don't have the drive and excitement about it, they're less likely to spend time looking.
• Finally, and most importantly, a desire to learn. Most REAs are in the business to sell homes, but most are also eager and willing to learn something new in order to help better serve a client. 

Good luck to you!

Andrew,

Some investor-friendly REAs that I would recommend in Lubbock for multifamily and commercial properties would be Shannon King, Carl Tepper, Jeremy Steen, and Jef Conn. All of whom are industry professionals that I would trust to represent me. Full disclosure, I am also a commercial REALTOR® that specializes in multifamily property investment, so I would be more than happy to help you out or answer any questions that you might have.

As far as single family investment REAs in the area, I highly recommend Doug Duncan, Don Beard, and Lisa Victor. Each of which  I have seen find killer deals for investors.

Contractors and subs are the more difficult problem to solve, as even the big contractors here are having trouble finding laborers to work job sites. This is a double-edged sword; there is tremendous growth taking place in Lubbock, but that growth is what is occupying the time of so many good subs in the area. I will keep my eye out and let you know if I hear of anyone that would fit this role. Are you looking for someone to do full-scale remodels/flips, or more just someone on call to do any necessary maintenance and repairs that come up?

-Matt

Ryan--

Something to remember about cap rate is that it is not an "end-all be-all" ratio. It is simply a means of allowing us to more easily compare properties whether they are similar or not based on the value created per dollar spent on a property. 

Rather than thinking of it as a return, it is good to think of it as the point at which the capital and space markets intersect. If the net present value of an investment makes since to you but the cap rate is different than what you would expect, don't immediately push it aside. For example: you have two investment opportunities, A & B, that cost $1M and $500,000 respectively. You could have a lower than average cap rate on A, but higher NPV than B. This would make the lower cap rate option a more desirable investment in terms of wealth maximization, even if the cap rate is below the market average. 

Good luck!