All Forum Posts by: Matt Popilek

I would say your better off at a small out fit rather than the big guys like CBRE. If you wanted to be a full time commercial broker that is where you go and cut your teeth for a few years until you earn your stripes. I would ask you teacher if they know anyone that owns a smaller yet successful commercial outfit a boutique firm or a mom and pop. Make sure they have CoStar and LoopNet subscriptions also another good one is Reonomy if you are wanting to find deals that is the subscription you'll want to have access to. They should also have either a subscription to a service or an employee that prepares OM's for your future listings. You don't want to be in charge of building the marketing pieces it takes too much time.

This is exactly what I did 3 years ago. I wanted to Buy MFU and I didn't know what I didn't know. I ended up finding a small family owned CRE company in my market. They asked me to work in their office, and our goals aligned. They were MFU investors themselves...they owned 300 units at the time, and now I think they are up to 800. So I hung my license here, and was able to learn from their experience with renovation, and blighted property.

My main advantage is that when I get the Seller on the phone I have multiple options when it comes to income.  I can list the property if it is not something I want to Buy or if they want to much $$ for the property. The license also opened me up to meeting a lot of investors that now I can partner with in the MFU space. Listing a few decent deals on LoopNet or Crexi is all it takes to build the Buyer pipeline.

I would say the best benefit is you are in the trench's you get to see all the deals, and you can capitalize on all of the Seller's you meet rather than just the deals you want to take down. 

Good Luck! Matt

I list 25-50% of my properties on LoopNet and Crexi.  I would say a bulk of those properties are priced higher than some investors are willing to pay. That doesn't mean that you can't find a deal on the site if you take the time to review the deals, and put in offers. I recently went under contract on a deal on LoopNet that cash flowed at a current 8% Cap Rate with a very easy value add that would increase the value of the property over $1.5M just by raising rents with out doing any rehab.  If you pay attention those type of deals could be found.

are these numbers Annual or Monthly break down?  or are they mixed and matched?

I would make sure you get a referral from someone you trust in that market. Don't go at this first deal alone! Find a local person you trust, and maybe even look to JV with that person.

Pittsburgh, PA has been hot the last week.  2 package deals came across my desk, and I am looking for a Buyer.

42 Unit deal Section 8 tenants $1.2M GR = $301,580 NOI = $142,859 11.9% Cap Rate

65 Unit deal $4M GR = $614,372 Expenses still in review Roughly 9% Cap Rate

Send email to [email protected] to get more information.

Thanks,

Matt Popilek

My biggest question would be what type of return are you going to get on the addition.  

My initial response is I would get a loan on the duplex that is paid off in order to reinvest the money into another deal. Since the equity is not helping you gain anything outside of security if you are comfortable with a little of risk on the property you could leverage to increase your income. You are currently only making $416/month on the duplex so that should be taken into consideration on what size of loan you take out.

If you take out a loan would the money be better spent on the addition, or would it be better spent on another property? Which would give you a better return on your investment? 

I have personally dealt with this thought as I have a duplex and the third floor is an attic space that would rent for $8000/month. The renovation would cost $25k.  Every time I go to finish that project I look at my options, and every time thus far I find that the $25k would be worth more to me if I deployed it into another property rather than finishing an addition.

If you are growing a rental portfolio for passive retirement income the most important question (per my opinion) is if I borrow X what will I get in return?

Bigger Pockets provides a pretty nice proforma application you can use to figure your offer based on your return requirements. You can do simple math to get the ball rolling - (rent) x (# of units) x 12 = (Annual Gross Rent) Divide by 2 = your VERY rough NOI then you divide that number by the cap rate you would like to see...say 10% or .10 that would give you the purchase price. I think I would be trying to get the Seller to tell me their price before offering a price...usually they start higher than they are willing to go..that gives you the advantage in negotiating the deal. Also it prevents you from upsetting the Seller when your numbers are significantly lower than their numbers you can soften the blow by outlining why your offer is so low. If this is a C property I might be trying for closer to a 12% cap rate, but that will highly depend on the market you are in, and the expectations of Sellers in that market.

This is an off market sale - I am not selling, but am helping a client to move this package.

41 SFR currently rented to Section 8 tenants - 1 Duplex as well. Gross Income $277,454.00 - NOI - $142,859

Seller is requiring proof of funds prior to showing the asset. The Buyer will need to pay the consultant a commission at acquisition. 

This is roughly 11.5% Cap Rate with a 20% CoC return.

If you would like more information please Direct Message me.

Thanks - Matt Popilek

CoStar is not very effective in the MFU space. 

I recently started using Reonomy for my data and contact info for MFU. 

I am not 100% on how accurate this service is as of yet, but it seems to be much better than CoStar in this niche.

I have been cold calling MFU owners for 3 years now and Reonomy seems to be the most promising option I have found thus far.