All Forum Posts by: Michael Wolffs

Most of the discussions about had money lending are from the borrower side. What I'm looking for is more from the standpoint of how to get into the lending side. Are there any resources available (and especially avoiding the guru route), on how to break into this business, and how it works from the lender side?

I will be there.

Chris,

Do you find direct mail to owners of complexes to be effective?

I would think getting "real" addresses (meaning an address that would get the mail item into the hand of the owner of the complex) would be difficult. The ownership is usually a LLC, that may in turn be owned by another corporate entity, and who knows how up to date the addresses are for those entities, or if anyone actually checks them. They more likely than not are front ended by a management company, and who knows if mail addressed to the owners send through the managing agent will actually get to the owner.

From your background, I would think you've done this before. We all know direct mail has a low, but fairly reliable reply rate. What kind of reply rate have you gotten in the past? And, also, how are you sourcing your addresses?

Thanks for any info,

Mike

While what you say is true, it doesn't change anything. Based on the OPs post, the trajectory of the area is flat. If you buy a run down property, you may get some bump to cash flow and value by improving it, but you can't leverage that improvement through neighborhood improvement to get big equity increases. If you buy a nice property in the same area, you really don't even have the opportunity to improve the property to push up the value/cash flow. In either case, you need to be happy with the cash flow for the deal to be worthwhile.

Would you be happy with it as a pure cash flow play, with little or no equity appreciation? I think you can insulate your self from the 'hood issues via third party management.

Doing a fairly significant rehab/remodel to a triplex in Jersey City. Have a couple of numbers already, but would be happy to get more bids. Knowledge of JC's building department bureaucracy a plus.

I'm in EXACTLY the same position. I closed a week ago last Thursday on a vacant triplex. I bought 3x1bd/1bt that I hope to turn into 3x2bd/2bt + 1x2bd/1bt. Doing the contractor shuffle right now.

Ben,

So the area is currently very bad. Does it show any signs of improving? Are the surrounding areas improving?

Jeff,

There's a couple of closely related questions I had, and you didn't include this information in your initial post.

What is the cap rate, and if you purchased the property, after debt service, would you be cash flow positive? Also, does the property present obvious ways to improve cash flow?

Whether the deal is worth pursuing will come out of the answers to these questions.

Kimberly,

Thanks for replying. Where you have pay machines, did you buy your own machines and service them yourself, or do you rent the space to a laundry company?