All Forum Posts by: Michael Reilman

Are you showing and leasing the rooms also in addition to managing tenants? Are you collecting rents? How many total units? Understanding your full role, how much of the property management you are doing, and the size will help narrow that down a bit. 

 What's the unit split/ratio? Also, the commercial units add an interesting element to this, and while I don't know much about I do understand that some commercial leases can be real money printers. So to me, it's a question on what % revenue are all these making up? I think studios are harder to fill, and 1 bed appeals to more potential tenants. I would expect the studios to make up 25% of the units in the dark? Also, that may not matter much on if it's a good investment or not depending on if all the commercial leases are filled and their duration. 

This is interesting, everyone says how you should go as big as possible as fast as possible (to which I understand) but a book on smaller deals? I'll add it to the reading list! 

How much would you say? I am working on a deal now that has this as a component to the value-add. I see a lot of potential in this, but I also understand the increased water cost, and people running their own laundromats haha. 

 For about $150 you can get Michael Blank's SDA (Syndication Deal Analyzer). There are a series of videos that you get access to that go over the basics on how to use it. Then, you can go and play around with some variables to see what effects what and how much on the spreadsheet. 

This is what I use and I think it is an excellent tool for the price. I will say it is easy to make a deal look amazing and easy to make a deal look horrible if you aren't careful with what you are putting in, and that is where education comes in. 

To back up what @Evan Polaski said, you can definitely underwrite deals on Loopnet, but now you know what bad deals look like. You can start start networking and find someone who is an expert in what you want to and use their experience to give you credibility with brokers. Or you can start building your investing pool through that networking and tell brokers you are working with investors. They then can start feeding you deals and you can get more comfortable with underwriting deals. 

I've also found that a decent strategy is calling younger or more inexperienced brokers. There is a mutual understanding that you both are hustling and are starting out, so they are more likely to give you the time of day. 

Either way, you do want to be honest with your capabilities but still be confident! There are stories where people's first deals are 100+ units but you need the team and know how to execute! 

Hey Scott, to answer your first question, the value of a property does change anytime the NOI changes (income or expenses) but most people will analyze a T12 the get it.

For your second question, it usually requires 2 years of seasoning/ownership to refi a commercial property. That is more a lending guideline rather than a hard and fast rule. To get around this, you need to have a good relationship with a bank, and show a strong track record that you can not only increase the value of the property but maintain that strong performance. 

Hey Kevin, 

While it is very common for owners not to want everybody to walk all over a property and disturb or tip off tenants, it is pretty uncommon or unreasonable to expect someone to take your inspection. Personally, I would never purchase a property without professional, 3rd party inspection. Could be hiding something, or could have the best intentions. Also, something could come up since the last inspection that needs to be addressed. I would pass on the deal if they don't let you do your own. There are plenty of opportunities out there! 

Also, to add on to Michael's comment, the SDA (I'm not sure which version) changed the COC to IRR when the returned capital on a refinance is 100%. This is due to the COC effectively becoming infinity, since you or the investors no longer have you original investment in the deal. There is a note in the Summary tab that should pop up and say this.

Are you a broker? Or syndicating? You could go as simple as a Powerpoint with Excel attachments. There are a ton of free templates online that you could download. Then you can save that Powerpoint as a PDF to then distribute.