All Forum Posts by: Michael Reilman

I own a condo that I self manage, and I like the HOA fees because I don't have to worry about the outside of the property and they are low. Also, the president of the HOA rents as well, so he has an investor mind. This is nice because he is actively trying to keep costs down / manageable while spending money where it is needed.

I wouldn't say condos and HOAs are all bad, depends on the cost and if you can cash flow. I've heard on podcasts of people who only own condos, so they can work. Most condo HOAs ruin the return completely. Also, I would say if the numbers pencil out well, it's a great starter investment because of the first paragraph. 

Bonus question: if you own each unit in a condo development, can you avoid the HOA? (My association is only 7 units.)

On top of what @Michael Garofalo said, I get a lot of value out of podcasts. Just listening to 3-4 different ones daily drills in some basics, and educates you on some corner cases you may encounter. 

Came here to say this. Usually this mentality leads to an inexperienced sponsor landing a deal but with nowhere to go and a deadline to hit, so you go to the person that you know can raise the money. Not saying is a bad way to go, since something is more than nothing, and the experience of going through the entire transaction is very valuable with experience on your side, but I believe it makes sense to do both paths. Network with everyone, Brokers, investors, experienced sponsors, etc. So if you get any deal, you can pounce on it no matter the size. 

 Just to generalize what others have said, ALWAYS buy on actuals, and underwrite the upside on what you KNOW you can achieve. While not necessary, it's nice to have a Real Estate Tax Attorney on your team. They can pretty quickly tell you if you can argue (file) the taxes lower after acquisition. The problem is, at least locally, they don't audit it regularly. This means they just base it off sale price most of the time. So unless you purchase it for less than what the previous owner paid for it, you're likely stuck with that or higher tax rate for 2-3 years. 

You do not include debt service, since one person could pay in cash, and another could finance. It's more of an apples to apples metric because financing is a whole-nother part of the equation on cash flow. 

And no, you do not include cap ex's since they are considered once in a long while expenses or upgrades to the property, and not part of the cost in operating the property. 

I find this funny since it is a 2 year old post and we are still thinking there's a bubble to pop! 

Now for something current: Things are still overpriced and people are still overpaying, but deals are still out there. Just be sure to keep underwriting conservatively with healthy cashflow and you can buy in any environment. 

 Hi @Pete Abilla, 

I've heard good things about Lokal Property Management. I have never used them as I am in the 5+ unit space, but I have a friend who uses them on his SFR portfolio and he's happy with them.

 @Isaiah Webb These are good questions, because it identifies very quickly how motivated they are and how in demand their property is. Ideally, what you want to do is identify what their problem is and figure out how to solve it. Sounds simple, but in my discussions with sellers it does boil down to some motive that needs to be met or they probably won't sell. 

On top of that, I like to get the data, like occupancy, any major problems or tenants that are difficult. You can also build rapport by joking about it or getting them to open up about being a landlord and how difficult it can be. 

 Some things you do want to pull from the Broker's OM as @Greg Dickerson said, like what's around that's attractive, walk scores, etc. 

I personally have a Power Point template where I display the Executive summary and fill in the info, screen shot data from whatever calculator you use, and have some sort of display on major milestones of the project. This could be pretty basic or in a Gant Chart. Power point can "print" or export in PDF btw. 

Hi Andrew, 

If you are looking for anything 4 units and under, you can go to any Title company and give them a list of your criteria and zip codes you are interested in. I did this when I was into quads, and they do give you an excel spreadsheet of some useful info including address. For commercial (5+) you would have to go to one of the paid services you mentioned, or get friendly with a broker who already paid for these services. 

What will you do with just address? Go to the tax auditor site to find the owner?