All Forum Posts by: Charles Dobens

I love what Joe said. That is exactly what I teach my clients. Never do cap ex with current cash flow. Recipe for disaster. Also, like it was also mentioned above, don't look at a roof replacement as killing your cash flow. There are accounting benefits to the expense of the new roof that you are not taking into consideration when you say that your cash flow is non existent. Apples and oranges.

I agree with Erik W above. There are deals to be had in your own backyard. You just have to do the work and find them. For some magic reason, new investors think all the have to do is move to a market that some guru called hot and their business will be instantly launched. The difference between your own backyard and Austin (assuming you are still learning the ins and outs of Austin) is that when a deal comes along in your own backyard, you will know its a deal. You won't have that benefit in a new city. 

I love those people that pick up the phone to call a broker for the first time and use that age old tired criteria - "I'm looking for a C in a B". If you have never been to that town before, how would you know what the broker shows you is truly a C in a B. More likely its a C- in a D. But how would you know.

This is a business. All business involves risk. Your job as the leader of that business is to reduce that risk as best you can. Starting in a new business that you little experience in, that is 1,000 miles away, being overseen by someone that you met off the internet and you are doing it with other people's money is a recipe for disaster. I am not saying it can't be done (heck, I've done it), but my advice is to minimize risk!

@Nikolas Engel It sounds to me like your seller accounted for it correctly. Typically you will see sellers try to bolster their NOI and thereby increase the value of the property by miscategorizing expenses and putting them below the line. IN your case, you say that the expenses are ones that are incurred every year. If that is the case, that expense should be placed above the line and expensed when incurred. Sounds to me like that is a turnover cost and that would be considered an operating expense and not a capital expense (a below the line item). The seller is helping you out by categorizing it as an oeprationn expense.

Justin, one of my clients has done this successfully and was interviewed on CNBC about it. YOU can see it here:

https://www.cnbc.com/2021/02/0...

His name is David Peters and is in the Minnesota area. You should reach out to him. Great guy and incredibly knowledgeable. 

@justin G. Thanks Justin. Just signed up to speak at the next one. I think my topic is the step-by-step process for identifying your multifamily market (or something like that)

@Shenes Benniefield Watson Everything mentioned above is accurate but there are so many other pitfalls to doing an assumption that you need to know before heading down that path. I have written a LOI specific for making an offer on an assumption deal that build in protections from the Seller and the Lender so you are protected. Let me give you one example. Do you know what the seller as on reserve with the Lender currently? Did you know that at the closing table, the Seller walks away with that money and then you will be required to replace it. If you didnt account for that in your raise you will go to the closing short of money. (Ask me how I know this.).

It's interesting that Kansas City keeps coming up on people's radar. I have several clients who are having great success in KC. When I help them evaluate the deals, the numbers always look good. I did a podcast a while back with Steve Worcester who ultimately owned 3,000 units in KC starting from nothing. He sold out to his brothers and started a multifamily service-related business called Simplifyy that any MF owner/operator should check out. 

"I can't find deals."
"I can't find investors."
"What if the economy tanks?"

In the end, you are paralyzed with fear and you end up with....nothing.

But it doesn't have to be that way and you DO NOT need a crystal ball to know what is going to happen in the market in 2021. You just need the right tools, tips, tricks, resources, and INFORMATION. 

Will you be ready??

Join us for our LIVE, VIRTUAL, 3-Day Event March 18-20, 2021 for 3 days full of multifamily investing training.

"Shifts Happen: Shifts in Money, Market, and Mindset" 

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Visit ShiftsHappen.ONLINE NOW to get our LIMITED PRICING offer of "Buy One, Get One Gold Ticket" to share with a friend or colleague! 

JOIN MULTIFAMILY ATTORNEY CHARLES DOBENS & SECURITIES ATTORNEY JILLIAN SIDOTI on Weds., Feb. 24th for their LIVE, Free webinar to make sure YOU are ready for the big shifts ahead in the multifamily space! Don't miss out on the opportunities that await you! Register HERE

Here’s the full scoop on why and how the next big wave in multifamily is coming:

It doesn't matter how much money the government prints in an attempt to keep the economy afloat. The reality is that the stage was already set for shifts in multifamily marketplace and in money PRIOR to COVID-19. The pandemic may have just sped things up.

Why?

The population is aging and Baby Boomers are downsizing to more affordable and accessible solutions.17% of all Baby Boomers (ages 55 to 73) have less than $5k in retirement savings. Even scarier, only 16% of the overall population has in excess of $100,000 saved for retirement.

Whoa!

But where are people living and why does it matter?

RentCafé indicates the share of renters makes up 34% of America's general population and on a national level, since 2010, the number of renters has increased two times faster than the number of homeowners, climbing by 9.1% and 4.3%, respectively. There are more renters now than ever since 1965.

But...

Nearly 12 million renters owed an average of $5,850 in back rent and utilities by January. In November 2020, 9 million renters said they were behind on rent, according to a Census Bureau survey.

What does this mean?

Simply, opportunity.

Will you be ready for the opportunity of the next multifamily wave?

In the next Multifamily Warroom webinar, Jillian and Charlie will discuss the shifts ahead and how you can take advantage of them. 

In this free webinar, you will learn:

• How should you evaluate the markets based on the changing trends we see today?

• Is my market the right market to be in over the next ten years?

• What types of apartments will my customers be looking for by 2025 and how do I position my business for these changes?

REGISTER HERE!

See you there,

The Multifamily WarRoom

www.multifamilywarroom.com 

LIVE, FREE Webinar THIS Saturday, April 18th on "How To Choose Your Market Based Upon Demographic Changes".

"How to Choose Your Market Based Upon Changing Demographics"  REGISTER HERE

Charles Dobens, the Multifamily Attorney and the founder of the Multifamily Investing Academy, will be discussing John Burns and Chris Porter’s book "Big Shifts Ahead" and how the changes in demographics between now and 2025 will impact markets for multifamily investing.

We will discuss:

• How should you evaluate markets based upon the changing trends we are witnessing today?
• Is my market the right market to be in over the next ten years?
• What types of apartments will my customers be looking for by 2025 and how do I position my business for these changes?

REGISTER HERE: https://www.multifamilyinvesti...