All Forum Posts by: Mike O'Connor

@Todd Whiddon that garage is turning out to be a ton of fun for you, haha. Congrats on getting it under contract, it's great work! One last meet up/tour to see the final product?

Once you figure out what type of property and area that you want to buy, you could look for similar properties and actually call as if you are an interested potential tenant. You can get info on the rents, amenities, etc. and then compare it to your prospective purchase.

Of course doing research on the demographics, employment, etc. is still critical.

I would suggest buying a small MF (3-4) units and then living in one of the units while renting the others out. If you are looking for inexpensive living for a few years, nothing beats "free" living (it's more like offset living than free). If the deal is right, the cashflow of the rented units could offset your personal living costs, and you could even make a little extra each month. Also, by living in one of the units you would get the benefits of financing rates from the bank that they normally give to personal homeowners rather than investors. Then, once you're ready to move on, you have a MF in your portfolio!

As long as you are not trying to go specifically down one path (office space vs. MF), just run the numbers on everything that comes across your desk and see what makes sense. As far as finding great deals, you really just need to spend time building your network. There are likely a lot of full time investors out there that could use your strong W2 to help with financing, while they have the inside track on great deals (you would obviously need to syndicate). Just realize what it is that you bring to the table and market yourself accordingly.

Also, if the numbers don't add up in your area, don't be afraid to look in other places that are a bit further away. Good property management allows you the luxury of managing from afar...

As far as making these connections, keep being active on sites like BP, that is how I met my current business partners on a 32 unit deal in ATL. @Matt Wood @Azeez K. @Kiran K 

If you are in the Portland area I strongly suggest that you listen to the Real Dealz Podcast hosted by @Tucker Merrihew ....it has great info around market updates in your area. I live in ATL and listen to it frequently.

Best of luck!

Mike

I would absolutely expect to get rent rolls before you place an offer (as well as the other items you listed) because that gives you an indication of the properties performance. And, in MF investing, it is the performance that should dictate your offer price. If I were you, I wouldn't give the seller the offer until I at least had an understanding of the rent roll.

Good luck!

I was referring to whether or not you paid the utilities for your tenants. Paying utilities while it is vacant can fall into the vacancy or the general section.

Will you be managing the property yourself, or using a property management company? If the latter, you would need to factor in ~10% for that to be safe. Are you charging back utilities to the tenant(s)? Advertising costs for finding tenants? Eviction/legal (a 'general' category for the unknowns) could also be helpful if you are trying to be conservative. Also, don't forget to include the things that work towards your benefit like rent inflation.

I always like the idea of buying a property that is poorly managed (which it sounds like this may be) and looking for value plays to increase the value and create instant equity... for the occupied units, how does the rent roll compare to market values? Was the previous owner covering utilities for the tenants that you can now charge back? When looking at a MF, value plays like this heavily weigh into whether I think it is a good deal or not... best of luck!

@Andrew Cordle thanks for the insight, that is helpful. The individual they have in mind has the highest certification (PCAM) and has 15 years of experience, so she is certainly qualified. We would need her to handle a good bit of major projects as well as drive us through what I would say is a 2-3 year overall facelift initiative, so there would be a lot of responsibility. If possible, it would be great to hear what your brother in law thinks...

Thanks!

Mike

Hello all BP Members,

I figured there is no better forum out there to help me get an answer to a non-investment related dilemma I am facing. 

I currently serve as the President of my condo association in the Brookhaven/Buckhead part of Atlanta. It is a 300+ unit complex, brings in ~1MM a year in dues and other revenues, has 17 buildings and is about to be going through a period of a lot of structural and facility updates to make sure it keeps up with the times. I say this to highlight the fact that it is in a nice part of town and is a fairly large complex.

We are searching for a new full-time, on-site property manager to run the front office, handle community business, manage the maintenance team/contractors, etc. With all of the upcoming changes that need to be managed, we are looking to hire a property manager that would fall in the "very strong" category. Our property management company tells us that in order to obtain a "very strong" property manager (PCAM type) the going rate would be about 90k a year for a base salary... plus benefits and a potential bonus.

My question to you all is: is 90k the going rate for a "very strong" on-site property manager in the Brookhaven/Buckhead area? We are trying to right the ship around the community and remove all inefficiencies that are going on with our management, but we do not want to overpay.  I am willing to pay the 90k if it leads to delivering results, but I want to make sure that we are not overpaying.

Thanks in advance!

Mike