All Forum Posts by: Matt J.

You'll probably get this answer a lot, but it depends. I can't weigh in on the best time of year to buy property in Sarasota, but turnkey or rehab I can speak to. 

For your very first property, if you have enough cash saved up and not a lot of experience doing any rehab work, I think going turnkey is a totally fine way to go. 

To get started, determine your criteria. Are you looking for single family houses? Duplexes, triplexes, quads? Are you looking for 3 bedroom or 4 bedroom units? You get the idea. Then, get pre-approved by a couple of lenders. Next, go to a few agents, share your criteria with them and your pre-approval and start receiving properties to review. Also, start working with wholesalers and network with property managers to try to find deals that are off-market. 

If you're shorter on cash and have some background or at least a strong willingness to learn the rehab process, doing a rehab could be the better way to get started. In this case, determine your criteria first, just like you would for turnkey. Then, instead of conventional financing, look into hard money or construction loans through small banks and credit unions. Then you'll need to start vetting out contractors to work with around the same time you start working with agents to find deals for you. If you'r doing a rehab to start, driving for dollars makes a lot more sense than if you were goin to do turnkey. 

Best of luck!

Many people have already said this, but keep searching for a different deal. Way too many things could go wrong with this one and there's not enough equity to make it worth your while. I also was wondering where you came up with setting aside 20% for Capex and 10% for maintenance every month. Setting aside that much makes it seem like it would be pretty hard to find many places that would cashflow at all.

@Jeff Rogers I've heard something similar from other lenders on the "don't ask, don't tell" thing. That just makes me nervous though. I did talk to a lawyer a while back about protecting yourself with your rental properties and he suggested I could do a lot of that with an umbrella policy versus putting them into an LLC. Seems like there's no real consensus though on what to do.

That sounds like my worst case scenario right there. Glad you were able to get it figured out!

Thanks everyone! I see that apartments are quite a bit different than single family and duplexes/triplexes that I'm used to when considering the financials behind them. Still have a lot to learn in this space. 

Yeah that's what I meant, that's a great rate! 

Thanks David, really good insight here. Never considered this perspective of the cash flow per door changing while the CoC and IRR could remain the same. Your 24-unit, do you own that individually or did you raise funds for it?

I guess I'm looking at apartments not so much from the syndication model as a single owner, potentially 2-partner purchase. Does that make the return per door more relevant or not? 

I know this will vary greatly by market, but in general, what are people targeting for cashflow per door on mid-sized apartment buildings?

@Scott Goulet you should interview some new property managers. Find 3 or 4 and ask for referrals from current property owners so you can hear from them on what the experience is like working with that particular property management company.