All Forum Posts by: Keenan K.

Duplicate post.  Don't know how to delete!

@Ian Kurela

Ian, thanks -- appreciate it! 

Nope, not a new asset class - we're exclusively focused on multi.  I would say 85% of the deals we currently UW are typical brokered market-rate deals.  Like many other groups in the space,  it's been tough recently to find deals that we can get to pencil.  We have competitive capital, but typically aren't aggressive enough in our UW to win deals in this environment.  Currently better suited as a group to be in the competitive mix and step up and close if necessary.  But it really does seem like high bidders are actually closing -- don't see too many kick backs.  

And then the remaining 15% are deals that come in through unique sources (off-market brokers, lawyers,  lenders, friends, etc.)

@Josh Stack  

Josh,  appreciate the detailed post!   Read everything you linked -- really helpful.  

Also, good call on the Charlotte beer scene -- I did some research and you are not wrong. 

Hi All -- 

I'm new to the Charlotte forums -- nice to meet you all.  

I work at a family office based in Pittsburgh, but it's been an initiative of ours to better understand Charlotte and hopefully find some investment opportunities.  Generally, we're looking for apartment buildings that are 150+ units,  Class C/B, or distressed.  

I typically go through the traditional brokered channels, but its been incredibly challenging to "win" deals in this cycle so I've been spending more time trying to generate off-market leads/find deals that are messy or broken in some capacity.  

Would really appreciate any insight you guys have in the market and any referrals/suggestions for good people to meet with in the area.   I'll be travelling to Charlotte a bunch in the next few months (including next week) in an effort to find some deals!

Also, let me know if I can help out in any capacity.  My background is primarily in financial modeling/underwriting in both acquisitions and development, so I'm probably best suited to help in that area. 

Thanks all!

Best,

Keenan

@Hoa Nguyen It probably makes the most sense to be a passive investor at the beginning.  And in the mean time, just continue to learn as much as possible about investing in multi-family.  

If you go the route of finding your own deal/finding a sponsor, I have no doubt that you'll learn an incredible amount, I just think there is a real chance you may spend a lot of effort without actualizing a deal.   Our company has been approached by a few people form Lindahl's camp to be a sponsor.  The people we met were generally impressive.   They were hard working, smart, and found real off-market deals for us to analyze.   But in every case, they spent incredible amounts of effort networking in markets with brokers/sellers, and we just couldn't get their deals to make economic sense for us.  But to be fair, we're a conservative investment shop and only do a handful of deals for the hundreds we underwrite every year.  

Let me know if there is any way I can help.  Happy to help analyze any deals you may find on your own.  Also, I'd be happy to share with you the return metrics we have on our sponsored deals so you can get a better sense of returns for passive investing with an established private sponsor.  

@Jamel Williams You can definitely do at least duplexes with FHA 203(K). Obviously you would need to occupy 1 of the sides though. I can't speak to triplexes/quadplexes. But my best guess would be that it could be up a quadplex for FHA. After 4, you'd be getting into commercial

Thanks for the responses all. Just a quick update here. An "As-is" appraisal was ordered and the appraiser declined/refused to do the assignment. Pretty amazing that a 1 sentence opinion on the "as-is" value buried deep in addendum section of the ARV appraisal report is forcing me to bring an extra $121K to closing if I go that route. Can't even get 1 comp provided to me to support the unheard of low as-is value. Incredibly frustrating.

Hey All -- 

Was hoping to get some opinions/solutions for what I can do here. 

I'm under contract to purchase a duplex -- financing it via FHA 203(k). Purchase price $191,000 and was approved for $125,000 in rehab ($316,000 total). Everything was going smooth until the appraisal was ordered. These FHA 203(k) typically only require an After Repair Value (ARV) appraisal & that's what was ordered.

The ARV appraisal value came back at $288,000. This was a really low number for the area, but FHA allows the ARV value to be 110% of (purchase price + renovation dollars) so it checked out. However, the appraiser opined on the "as-is" value in the ARV appraisal report (although it was just 1 sentence in the addendum section) and claimed it was $70,000. I honestly thought it was a typo. Nothing trades anything close to that low. My realtor friends in area were baffled. Anyways, that "as-is" value caused major issues for the bank. If the appraiser simply omitted that 1 sentence from his report or was fine using the purchase price as the as-is value, the bank had no issues. But as a result, the bank's new condition was for me to make up the difference ($121,000) at closing, which I obviously don't want to do.

My immediate thoughts were to get a new ARV appraisal. But unfortunately FHA guidelines don't allow that. Bank said my only option would be for me to use same appraiser and pay for a separate "as-is" appraisal & hope he somehow changes his mind from $70K to closer to $191K. Granted he'd need actual comps now, but I don't have any faith here.

Sorry for long story. Looking for some solutions.  Closing is scheduled for 12/1 so running out of days here.  Seller is getting incredibly frustrated as I've already had to delay closing multiple times -- real chance they could walk after 12/1.  Would be all cash offers at that 191K price. 

Thanks all. 

H