All Forum Posts by: Michael Blank

Hi Michael ... I've done some direct mail after taking a seminar but I got nothing out of it. For me, most of my deals come from good commercial real estate brokers. In fact, I just wrote a Bigger Pockets article on that topic here:

http://www.biggerpockets.com/renewsblog/2014/03/03/find-great-apartment-building-deals/

Hope that helps!

Michael

Nice job @Dennis Tierney !!!

Jeff - check out the BiggerPockets article here that talks about creating a sample deal package to use with potential investors.

Michael

I agree that due diligence and property valuation are complex activities that need to be practiced over and over again. Having said that, there is a quick and dirty approach I use to get the property valuation at least into the ball park.

Take the reported gross income, apply a 10% vacancy factor (even if you're told the building is 100% occupied) to get the effective income. For expenses, including a management fee, use 50% of effective income. That is your Net Operating income.

That leaves 50% for debt service and profit.

Now apply your investment criteria to the NOI (cap rate, cash on cash return) to determine what your desired purchase price should be.

While this works OK, practice is key. Start yourself a spreadsheet and keep using it over and over, continuing to refine it. While you can become more efficient at analyzing, cutting corners is never a good idea.

Hope that helps ...

Michael

For me, it's a combination of tactics but they have been evolving. My ultimate goal an investor is passive income. When I first started out, my idea of passive income was that it was, well, passive. Since then I realized that there are very few investments that are truly passive. You MUST be involved to make sure systems are in place and you're achieving results.

While passive income is the goal, the way you get there is different. For me, I have combined flipping houses with buying and holding apartment buildings. The house flips produced cash that I could invest in apartments.

The trouble is that house flips are not passive at all, and can take up a lot of time. Over the last few years, I have replaced that activity with raising money from private individuals, and investing THAT money in apartments.

You just gotta figure out what the most efficient way is to get there, what suits your personality, and what is the most fun for you. For me, I enjoy the art of the deal -;)

Michael

I agree with the philosophy to do what you can to keep your good tenants.

On the other side of the coin is to get rid of your not-so-good tenants. One rule of thumb is to file for eviction as soon as the rent is officially in default (on the 21st day of the month for my leases). The key is to be consistent, i.e. don't favor one tenant over the next. At first we were trying to be more lenient and work with the tenant, but all of a sudden, the tenant owed us 3 months worth of rent! Now our policy is to start the eviction process to get the clock ticking *while* working with the tenant to get current. If they do, great, we love to have them. But if they don't, we have the ability to get them out.

Hi @Richard, and welcome to BiggerPockets! You have a great game plan. As you noted, getting your wife on board is key. Behind every great man is an even greater wife -;)

Michael

Hi Albert Jr - I'm in Northern VA myself. Welcome to BiggerPockets!

Hi DeAdria - welcome to BiggerPockets! The nice thing about wholesaling is that they work in nearly any market.

Hi @John Beck, welcome to BiggerPockets!