All Forum Posts by: Mo Karney

I'm current managing half a dozen properties for a total of 400 units and since some are stabilized, some are getting rehabbed, we have used different google drive sheets for each property and a second page on each sheet for expenses, but it's a mess. I have looked into Cozy.Co, is there any other software you guys recommend? Thanks!

@Balakishan Chenna

Pretty much all 75+ unit apartment complexes in e Midwest. Class B or extremely high Class C buildings in a Class B areas.

File an eviction notice. Even though there is no written lease, she is a tenant. Obviously with the whole virus situation, he's going to be stuck with the home until Q3 of 2020 most likely.

Congrats on the buy! But I don't think you're going to see $800/mo in cashflow. If you're collecting $2,400; bare minimum 25% gets earmarked for expenses. 

Is the $1,600 monthly payment inclusive of P&I, PMI, and property taxes? Texas is great for low state income taxes, but property taxes are the 5th or 6th highest in the US.

76 units; 6 vacant w/ 3 ready to rent. On the 60 due for April, I'm sitting at about 63% collected. Another 15 units are on a local charity's housing program and that comes in as one check every 10th and they have already reached out letting me know that not only do they have zero solvence issues but they would like the other 6 units starting next month. 

So all in only missing 4 units worth of rent on 70 units isn't bad. They have until the 5th and I already told my PM to waive the late fees for April.

It might not sound prudent, but buying a car right now is a great deal. Just picked up a McLaren 720s. Original window sticker of $400,000 with 3,000 miles on it with a FMV of around $290,000; I got it for $240,000 on a 84-month, 2.49% loan through the same bank that does my RE.

I can write a good chunk of the car payment off, registered it in Montana for tax reasons and I love it! I can keep the car for the next 6 months to a year and WHOLESALE the car for about $200k if I put say 10,000 miles on it and it takes a hit in depreciation from the new 765LT coming out.
 

@Matthew Paul

The thing is Paul, you’re not actively taking his advice currently right? Dave Ramsey simply put caters to the average/below average American household.

Save money, don’t spend it. Pay off your CC debt and etc.

I assume if you’re on this forum and have multiple RE properties you’re not worried about CC debt. I also figure you have more than a few thousand dollars in the bank?

His advice made sense to you in 1982 when you were in your 20s. I’m in my 20s and his advice doesn’t mean jack squat to me because I don’t carry CC debt, I have multiple streams of income and I do spend money on flashy cars and jewelry and watches. But I make sure it’s within budget.

I’m in the Midwest and mainly cater to the class B and class C properties and we’ll see how rent collection goes this week. I’m not too worried with unemployment benefits, stimulus package and etc.

@Marcus Johnson

Anyone taking advice from Dave Ramsey should not be on this site. Dave Ramsey caters to those living paycheck to paycheck and the bottom end of the bell curve. This is not a dig at them, it's a dig at Dave Ramsey.

He's an absolute idiot when it comes to investing whether it be securities or real estate and his track record shows that. 

In regarding to leverage, those that went full tilt and hit 80-90% LTV on their properties are now facing difficulties, but those that stuck in the 50-75% range, are doing just fine.

I buy my building with 75% LTV BUT I make sure that the buildings can support all expenses and debt servicing at 80% occupancy. On top of that, look at the PPP and EIDL program. Those with debt and loans are doing far better off than those that own their properties outright...

 Exactly. I figured it was oil money investors because of TX, but for example, most of my investors' money if from Asia or they work here locally for Union Pacific or out east and they are high W-2 earners with massive RSUs. 

Just like oil, the stock market and most of their portfolios have taken an absolute beating, they see no point in buying more shares as they get RSUs every year and past years' keep vesting like clockwork. Rather than deploy that cash now into the market and see another 20-30% loss, they want to up their buy-in on various real estate projects. For example:

I had a $4.8M 96 unit building so the DP is ~$1.2M. I was going to put up $200k and raise the $1m from 5 investors.... I have 11 investors that each want to put in $250k-$500k each. I could deleverage the property and do 50% down, but it doesn't make sense so I'd rather find more units to buy especially with the uncertainty, most sellers are discounting another 5-10% off their last asking price easily. 

Have a local 176-unit building at $9.95M; I was going to offer them $9.3M, but they dropped the price down to $9.095M and are extremely motivated to sell in order to pump that cash into their trucking/logistics business. I might be able to get it for as low as $8.5M!

Rather than trying to over promise at 16-20% (even if it's possible); positioning yourself as a safe haven for your investors assets/investments will go much further than trying to lure them in with high returns. If you were doing 6-10%, offer 12% and show that your numbers are conservative and you plan for the worst and can still be net positive even in a massive downturn.

@Jarrod Pettit, I think it depends on who you're raising the money from and the relationship in place both with the investors and how much skin you have in the game.

For all my deals, I always take 40-50% of the deal, but there were a ton of buying opportunities this year even before the virus. Now with rates almost 85-90 basis points less, I'm saving almost $20-$25,000 in interest payments alone and sellers are even more motivated. I'm under contract for almost 10M worth of buildings on 3 seperate deals and the sellers have upped concessions and been far more lax in terms of paperwork and closing deadlines (the banks are all WFH and dragging their feet even more than usual!)

Now these are sellers I have already worked with and the investors are already seeing a great yield (10-12%) so while they are getting hammered in the stock market, they are willing to write 2-3x even 5x checks to me since they know that we are buying properties below market value, in great areas with growth potential and they are CF+ from day one. 

Rather than position yourself as simply the real estate investment option, have you pivoted and positioned your properties as a hedge or a source of monthly cashflow to your investors?