All Forum Posts by: Mike Montana

@Ian Russell It seems the first question would be “what is your goal with your investments in RE?” If the goal is to pay off assets and have long term cash flow from those assets maybe it would be best to keep the duplex and pay down the dept. if your real goal is to scale and acquire more units it might be the time to sell it, unlock the equity you’ve gained and buy up. Either way there are always “issues” maintenance of the building or dealing with the residents.

@Josh Levan First off welcome to RE investing and BP.  I can't speak to all of Indiana but do have nearly 20 years of experience in multifamily properties in and around Indianapolis.  We are currently selling a couple assets in that market and acquiring a couple others.  We have always stuck to the space of "workforce housing" C and B class assets in B or better neighborhoods.  In our entire experience (even though 2008-09) we have never had lower than 90% occupancy in this market and have almost without exception seen rent growth YOY. Like any city, RE is specific to the sub-market or the neighborhood.  There are some great areas and some to stay away from.  By and large, the West side of Indy Speedway, Pike township, Wayne Township and west into Henricks County is good.  As well as north is good from Nora to Carmel, Noblesville, Westfield, and Fishers are good as well.  South from Homecroft to Beech Grove as well as Southport and Greenwood and even down into Johnson County.   The market is very diverse in terms of jobs and types of employers which makes it relatively safe form big downturns in the economy.  I realize this is very general but hopefully its helpful to some degree.  If you would like to further discuss PM me and we could even talk by phone if you like.

Happy Investing,

Mike

Hi David,

I'm not sure if I can give you a rule of thumb or matrics as to how many transactions to expect, but I can tell you want we experience.  We have laundry in a 15 unit building in the midwest which consist of about half 1 bedroom and half 2 bedrooms.  We chose to contract with a 3rd party to put in and maintain the machines obviously we pay for the water and electric.  The revenue is split 50/50.  The residents do have to walk to the back of the building to use the facility which is a slight disadvantage.  We average about 35-40 loads/month.  At one point we had 2 washers and 2 dryers but we removed 1 of each so we're back to 1 each.  What we find in general at this building is that people use the laundry as a stop gap for 1 load here and there, but tend to take 3-4 loads the laundry mat where they can do all of it at once and be done in about an hour or two.  It is, however as @Kim Meredith Hampton mentioned, a nice selling point for potential residents. Hope that helps. 

Happy Investing,

Mike

We are looking for a good property manager in the Muncie, Indiana market. The need is for small multi family communities 12 to 50 units. Mostly C to C+ assets in neighborhoods of the same classification. If you have any recommendation we’d appreciate the referral. Thanks in advance.

@Kevin Breazeale what type of work are you needing to do the the buildings? Are you looking for. GC to manage the whole process or do you have specific trades you are in need of like paint, drywall plumbing? I think I can certainly point you to some good partners if I understand a bit more about the rehab needs. Happy investing, Mike

@Leslie Laboriel there really isn’t any downside to buying a multi family property directly from a seller without the help of a broker. In fact we would prefer to find deals such as that. The only downside might be that a broker could help you identify components with the deal that you might not recognize, just because of their vast experience in transactions. But if you have a good team of property management, attorney, lender they can also add tremendous value in putting a good deal together. With that said we do see value in using brokers especially in the realm of finding deals. Happy investing

John, We have found that it takes a combination of things. We use rent-o-meter for a baseline. We also find that Apartments.com is a good resource, but you have to get pretty specific in your search really knowing the other assets you are looking at is key. However we believe that it takes some boots on the ground. We self manage so that means our team “secret shopping” visiting properties in the same area to actually walk some units and see how they stack up to yours. We then try to be on the lower end of the market pricing (not the cheapest but in the lower half of the comps). If you have a good PM on your team they should be doing the “shopping as well” that said I’d do some myself as well just to confirm. Hope that helps. Happy investing-

@Devin Lembcke With limited information about the 4 plex it’s pretty hard to advise on your situation. Things like what market it’s in, what condition is the property in, what the rents are and what the market rents are, and most importantly what are your goals. However in general I personally am a big fan of house hacking. We hacked our first multi family property 18 years ago before anybody knew the term house hack. That’s been the best investment we ever made to launch our buy and hold multi family business. Happy investing- Mike

We have a 60’ vintage 2 story building and have looked at just about everything to eliminate carpet on the 2nd floor. Problem being without concrete floors you’re just about stuck with carpet. Unless you want to rip up subfloors or ceilings and add insulation.

Congrats to you guys. In a market like we’re in this sure sounds like a real nice deal. Best of luck to you in the implementation of the business plan.