All Forum Posts by: Michael Orlando

@Taylor L. said it right! Check out comparables in the area and even put together a little excel table if you'd like - what's the bed / bath count? What are they getting for rent? Make notes on the features. What is the rent per sqft? Rent per sqft is usually an easy way to see if you're over/under charging as long as the finishes are similar. Size of the units is something I see a lot of people ignore sometimes, but it's really important. Theoretically, if you have similar features and finishes, you should be able to achieve similar rents as long as the area is similar too. If the comparable is 5 miles away and the area is much different, that's a different story. 

If you're really having some self doubt, I'd suggest partnering with someone who has a decent track record on your first deal and learning a lot that way. Truthfully though, if you're not going after a huge property on your first deal, you'll definitely be able to figure it out along the way! 

@Daniel Fridrij I invest in Cleveland love being here. That being said, we've been interested in deals in Dayton, Cinci, Columbus and even Akron/Canton. It really does come down to knowing the markets and where to be/going cap rates and price per door in the areas. I think wherever you invest you really just have to make sure your team is strong. They'll be your boots on the ground and they should know the market well. If you ever need assistance here in Cleveland, I'm happy to help!

I agree with the guys above. I feel like not factoring in those costs is very risky - you will definitely have those costs at some point. And you might be "okay" with no cash flow, but what's the opportunity cost of that money? You could invest it passively elsewhere and get much better COC and probably a good refi on a multifamily deal to where you have little to no cash invested in the deal after a couple years, and then REINVEST that capital! There are also many unforeseen issues that could come about with the new construction, although issues are possible on any kind of deal of course. If I were you though, I'd invest in some value add multifamily and refi that cash out to reinvest in the next couple of years.

How active do you want to be? If you invest long distance it'll definitely require more of your time and attention, but you'll probably see more deal flow. 

Or maybe you could bring capital to JV and have operators you trust. You could even invest passively in a syndication if you want to be totally hands off. Definitely a number of options! But what are your goals?

We use Evan Hirsch in Cleveland! He's been incredible for us. 

@Stephen Jones A lot fo the stuff we look at in Cleveland is on the older side. Some 20+ years older than the 50's. However, they were built right! We really haven't seen many structural issues at all to be honest and most are very solid brick builds that seem to age a lot better than newer stuff being built today. I would just make sure to take a loot at the MEP upfront and maybe get some kind of MEP inspection done during due diligence if you're worried at all. Structural stuff will usually shows up pretty easily I feel like. Also, have someone come out and inspect the roof during DD. Usually you can get a company that will come look for free if you just tell them upfront you'll utilize them for bi-annual inspections/repairs which are important with a flat roof. If the cashflow is strong and it's a great area, I wouldn't be too scared of the age at all if the aforementioned all check out!!

@Tony Ngo we use Winwood Properties for our stuff! Its bugger multifam, but I know they do a lot of smaller stuff as well. Martin that owns the company is a good, honest guy.

If you feel comfortable you can shorten your DD period which shows confidence and urgency. In addition, if you have a great relationship with your lender you may be able to remove a financing contingency/extension, but there's definitely a lot of risk in doing this at the moment!

Like mentioned above, hard money from day 1 is also a great way, but you put a lot of control in the sellers hands that way. 

I quit my job TO pursue real estate if that counts LOL