All Forum Posts by: Mike Cosmah

@Jimmy Stainback

Congratulations on your success!

I’m currently working with a client doing the same thing. After he decided on his desired market, team members (broker, pm, lender,ect), investment strategy and underwriting criteria we started putting in offers.

There are great opportunities for Cash flow Multifamily properties in the southeast.

@Paul Hamilton

You may not find duplexes that cash flow in your market as was already mentioned here. But first try driving for dollars. Drive around and find 2-4 unit properties that are not on the market. Do a little research and find out who owns them. Contact them and see if they want to sell. It's hit or miss, but there are good opportunities that come up where they will not be selling at the top of the market. Everything on MLS has already been picked through.

@Ryan Estes

Congratulations on your successes.

I would say that if you’re more interested in cash flow rather than appreciation to stay away from coastal cities because those are more appreciation investments. They are great for solid appreciation over time and longer term hold periods but they will not garner much in the form of cash flow. If you’re interested in cash flow investments you might want to stick to the Midwest or the South. Areas with a lower cost of living and a pattern of increasing population. These areas tend to have a much better cash flow up front, just don’t expect the same appreciation rates of those coastal cities. Think of it as a trade off, it’s harder to find a deal that gives you both high cash flow and high appreciation rate track records.

As far as knowing when you get a good deal. That seems to mean something different depending on who you are talking to. It’s relative to what you’re comparing it to. Some people live by the 1% rule, some people buy at a specific cap rate or cash on cash return. Decide what is acceptable to you and underwrite every deal to see if it meets your standard.

@Kari Morales

At a minimum we typically ask for current rent roll, T12 and leases. But the availability of these types of documents can vary depending on the current owner. Smaller MF properties are more likely to have owners who may not keep good records. So when you ask for these, it may be the first time any of it is actually recorded. It may not always be accurate either. I would take into account the vacancy rates and rents in the area. Inspect every unit during DD. Consider no available or questionable financials an increased risk and reflect that through more conservative underwriting. Everyone has their own level of comfort and it's ultimately up to the individual if they feel the level of risk is worth it. Some people will never work a deal where no financials are available, others work deals like that all the time. If it were my first MF investment I would be more conservative, push to get the info you want but if it's not there and you don't feel good about it, move on. Letting a deal go is never fun, but it's better than regret.

@Tony Spencer

If you plan on using a broker or agent when you purchase why don’t you see if you can find one in the areas you’re looking at and see if they will hep you out with a few good comps? You may not have the best luck initially, but eventually you’ll find a newer agent who is hungry and really wants the business. They’ll take the time to help you out. But only do this if you actually plan on using the agent if you make the purchase. Otherwise that’s not how to do business. Just look them up on google in each area and make calls until you find one.

@Prell Santi

Welcome to BP Prell! @Cody Lee share some great markets for you. I would also add the Carolinas; Durham, Charlotte and Raleigh NC markets. Even Asheville, NC.

Charleston, Columbia and Greenville SC.

Alabama; Huntsville, and some like Birmingham and a few others.

You mentioned that your a new investor. Are you new to OOS investing or RE investing all together? OOS investing can be very difficult without experience.

@Charles Seaman

I think there are some solid point raised here. The MF market is no doubt HOT and a lot of institutional and foreign money is raising demand and pricing along with it. I think any savy and reasonable investor would be concerned about buying too far into an up cycle. I think the devil is in the details; what market you’re in can make a major difference in all of the factors you mentioned. Many of those I know that have been in MF for a long time are still open to primary markets for the right deal but those are far and few in between. They always have been but it’s true more now than ever. They are focusing a lot of their time and capital in secondary and terciary markets that are showing promising growth and potential. It’s my opinion that this is the smartest move for many MF investors right now depending on their goals, available capital and strategy.

However, I will add that I still have A LOT of investors asking to find 100+ unit assets in FL. I definitely wouldn’t say it’s dead. It’s just extremely competitive.

Welcome to BP @Timothy Glen Huguenin! That's great to hear. Where are you located? Anything under 5 units and you can qualify using more traditional financing methods and live in the property.

@Ezenwa Jarrett
@Brenden Mitchum is on target. If you're looking at cash-on-cash then you're doing well to get 5% on B or C neighborhoods. Atlanta has become very targeted by out of state and foreign investment. Competition is high to find the deals and buyers are paying more by the day. 

Austin, TX and Raleigh and Durham, NC are some great ones that have already been mentioned above. What about more of a "sleeper"? I have a lot of investors inquiring with me about Huntsville, AL. There are a lot of medical, tech, and military jobs in the area. They also just announced that U.S. Space Force Command will be developed and built up nearby.