All Forum Posts by: Michael Heisterkamp

To add a bit of insight into this discussion of the cautionary type.  The value of college is rapidly deterioating, attendance is dropping and costs will only accelerate their growth curves and this will only cause things to worsen when the entire college industry is taken into account.  If you want to invest in college housing I would advise looking at the long term growth prospects of the individual school. Look at their budget vs. endowment, their spending on administration vs facualty, are they over building facilities?, are they maintaining their facilities?, how does the state budget impcat the tuition costs?, etc.  If this was 10 years ago I would have said student housing is a no brainer.  Now I am not so sure, demand curve is falling while the price continues to rise.

I use Hubspot for all of my businesses and they cover the gamut in the industry from investing to technology.  Hubspot is like many CRM systems and isn't really designed for real esate.  However it is free for the CRM and you can add on automation tools at a monthly cost.  Not sure how it syncs with MOJO but it is a good tool to try out CRM systems.  The upside to testing out CRM with Hubspot is that if you end up using a CRM system it can grow with you.

Congrats on the success.  I do think it is a good idea for an investor to be deeply involved with their first flip.  Aside from the money "savings" you can get from doing the work yourself I think the learning that is gained over the project is way more valueable.  It really helps to know what things should cost, what materials cost, what is necessary vs what is an "upgrade", etc.  These types of things are hard to learn if you are less involved.  

Nick,

Would love to connect. I am based in Boston as well and I am looking to get more involved with the REI community.

Michael

You can do a few things.

1. Go to your local real estate investor group meeting and see how you can add value to the investors there be it with social media, creating copy, SEO etc.  Use that as an opportunity to create value for the investor in exchange for learning how they manage their busines, how they find deals, how they conduct other related things.  Use this to learn about the industry, learn about the market and how you want to interface with it.  

2. Start a wholesaling business, ie. getting properties under contract and flipping them to other investors.  This suits your skills well and can provide some cash to start saving to do deals yourself.  This will require you network with local investors and flippers to sell the deals to.  This is the way many people get started in the industry and will get you up to speed quickly on the market.

3. Just jump in and get wet tackling a deal.  You will learn the most in the shortest time doing this but you will make mistakes, but don't think of them as that.  As long as you take away something positive you will keep moving forward.

Hello all,

New user to the forums here.  I have been working in the real estate space for a number of years and have experience in many areas of the industry.  Have professional and investment experience in the following areas,

- Instutional capital

- Instutional multifamily and mixed use management

- Direct investment

- Capital raising

- Commerical and Residential real estate

- Industry technology specifically in the Artificial Intelligence space.

- Hard money lending (Single Family fix and flips to value add commerical project)

I am availble to further disucss any of the above as well as can provide insight into other issues.

This really depends on many things, most pressing is the return on invested capital.  For example if you can purchase and rehab all in for 200K and the 4 units generates 4k per month.  If it will cost you 300K to create a 5th unit and let's even say that 5th unit generates the same 1k per month.  That is not a good use of capital.  

This sounds like it is going to come down to a cost per unit calculation as it will cost you significantly more to build in the 5th unit than it will to rehab a unit.  That is just the unit economics of reality. 

As for your base question there is no reason not to if the numbers make sense, and that is the key thing here. It doesn't matter if you can add 25% to the NOI if it costs you 50% more. At the base level the numbers have to make sense.

If you post some of the numbers here the commnity can help you out more.

With traditional lending you have a couple options.

1. 2 mortgages a traditional 20% down mortgage with a second mortgage to cover the 10% extra you need.  This costs more in terms of fees and interest rates will generally be higher.

2. You can do an FHA loan with as little as 3.5% down but that has other downsides. Modern FHA loans do not allow you to ge rid of mortgage insurace once you get past 20% equity. So you will have to pay that fee for the life of the loan. Also they have residency requirements so don't really work for out of state owners for obvious reasons.

With non-traditional lending you also have options.

1. Private captital, you can get a hard money loan to acquire the property and stablize it. If it is vacant or unoptimized you can add value that way and then go for a refinance in about 6 months or so.  Interest rates are higher with this but the process is significantly easier and is valued differently.  For example I do hard money lending and we have advantageous terms for those who want to add value to the poperty and we can move faster than banks as do most hard money lenders. 

2. Bring in equity capital from another investor and then get a traditional loan.  This has upsides as you can get cheaper capital from banks, however it complicates the decision making process as both (or all) parties have to agree on many things through out the process of buying as well as operating the property.

I would be happy to speak with you more if you would like some additional general information.  Feel free to shoot me a direct message if you would like to speak.

Michael