All Forum Posts by: Matt Popilek

The quickest and easiest is networking with brokers that sell multifamily. I send out Broker alerts to the commercial brokers in my area that usually gets a few leads each time I send the request.

Apartment associations are another good resource. 

Property Management companies can be a good resource if you approach them with a "I want to help" attitude. 

200 units is fairly vague.  Make sure you know the sector of town or state,  demographics, building type(s), return requirements, so that you don't spin your wheels on dead deals. 

Good Luck - Matt

We usually turn them in under 2 weeks as long as they are not trashed.

Figure in a vacancy percentage in the proforma a little higher than normal. Maybe 10%-15% vacancy since the are 4 units vacant that you have to fill. 

Construction costs can be deducted from your top purchase price. I do it the opposite direction. I add construction costs to my purchase price in order to come up with the cap rate I am looking for. Probably depends on the tool you use which way that goes. 

Good Luck - Matt

Do you need a Buyer Broker? No

Do you have to pay the Buyer Broker in MFU? No

I represent a lot of Buyers locally and from out of state. They often negotiate their own deals, and I negotiate deals I take to them.

My only request as a Broker is dont back door the Buyer Broker. If the Broker brings you a deal honor him/her for their effort.

There are companies like CBRE who don't pay Buyer Brokers fees. You can always negotiate that into the price. Know the game your playing and negotiate accordingly if you need to build in that commission.

Real Estate Agents are a dime a dozen (I'm one)! Find a few good Brokers in the market you want to Buy in, and give them you requirements. If their good they'll send you deals to review that are not on LoopNet, CoStar, or MLS.

Have Fun - Matt

@Matt Hendrickson I would be glad to meet up next time your in town. I'll send you my contact info in PM.

Down payments can vary widely depending on the deal.  In the two deals I am working now had different cash to get in the deal.

14 plex I bought from the city for $10. It was taken away from previous owner because they were not taking care of the property. I had to pay for all the abatement issues which totaled $29,000. So in essence I paid $29,000 to buy the 14 plex. Once I owned the 14 plex I used it as the down payment for the construction loan. I got $500k in construction funds with $29,000 cash out of pocket so 5.8% down payment.

22 unit I bought for $190k and have a $200k construction budget.  I got private money from a couple of my partners a total of $425k. That loan should cover everything including carry costs as long as we stay on budget which is a little questionable I may have a few thousand over budget that I may need to cover.  That being said I had $0 down payment to make this deal happen. There is about a 26% cap rate on this deal so it was easy to get investors to put up the cash. They wanted to be in the deal since it had so much upside.

Creativity is a great asset when your trying to make deals work with out a lot of cash in the bank.

This is my math -

950x8x12 = 91,200

91,200/2 = 45,600

45,600/.046 (4.6 cap) = 991,304

Can you turn any of those units into AirBnB or VRBO? That could significantly change future income, but I think this is over priced if I was going to buy it.

what expense ratio are you using? Do you have actual expenses? Are you using the future income to figure the cap rate? 

I dont think this is a 9 cap with current rent it is roughly a 5.5% cap rate off current rent. I am guessing at expenses. 

In using future income I'm getting roughly 7.4 cap

@Jaredith Mize - When you schedule another trip to KC for work schedule a meet up. Send me an email as I am better at responding to that then my BP account. If you can carve out sometime while here we could take a quick tour of KC, and I can show you where I invest, and what that looks like for JV opportunities.

This is a good question, and a truly difficult one to answer since each of us have a different level of risk acceptance. 

I would say working with you wife on the front end will make a much happier marriage in the long run.

Also partners can be tricky. I would say make sure your goals align with the long term goals and plan for exit if any. Also make sure each of you have an easy out clause in case someone wants to bail. If someone bails make sure if a stranger gets involved on the sale they have no voting rights or power to do anything outside collect an income check.

Grant Cardone says 16+ at a time. I personally started with 14. My second buy was a 22 unit. If I had to do it over I would do 20+ and I would have passed on the 14. The cash flow is significantly better on my 22 unit building. 

Also my 14 came as 2 seven plexs where my 22 came as one building. I really like the 22 under 1 roof. Commercial flat roofs cost a lot. I paid 36k for the 14 and 20k for the 22 unit with TPO replacements. 

1 roof, 1 plumbing system, 1 hot water system, 1 exterior electrical panel, etc. This makes for lower renovation costs, and lower long term maintenance.

I dont buy SFR as a hold for exactly same reason...two many systems to keep up for my liking.

Best of Luck, and if you want to Buy in Kansas City I am always open to JV options.

Matt