All Forum Posts by: Charles A.

Thanks @Gino Barbaro

I listen to your podcast with Jake too...Wheelbarrow profits.

You know what,you live in my neighborhood.

We should grab coffee sometime so I can meet the legend in the flesh ? :)

When we focus a lot on “population decline”,it sometimes turns into an excuse to not do deals.

In a major metro of more than a million people,population decline is not something I lose sleep over.

As long as you buy close to major employers,you’ll always be fine.

What I will never do is to buy an apartment building in small towns or suburbs with population of just a few thousands...

I think that’s a far greater risk.

And people who complain about Cleveland’s “population decline” have been known to come on BP to post a deal they just closed in Macon GA for example...

I’ve been to Macon.

That’s not even funny.

:)

@Matt Ward

Deals were getting very tough to come by in my local market.

So I ventured out of state.

It was easy to choose Cleveland because I previously lived there for 5 years and know the neighborhoods very well.

I also had privileged knowledge of the tremendous billions of dollars in investment that has poured into the downtown development over the past 5 years.

So while many data junkies on BP kept referencing the city’s “negative population growth”,I was diving in head first.

@Vincent Galvante Trust me,I will hit you with so much detail your head would spin.lol I’ll post my blog article here in a couple of days. Everything from how I found the deal to how I built my out of state team to how I obtained financing and where I found my downpayment. Just stay tuned.

Chris Tracy Thanks for clarifying. It’s @Michael Blank. My BP phone app is still not even letting me give him a mention... :)

I was that guy that was buying one or two duplexes a year over 5-6 years. That worked well on the cash flow and financing front. Then I started listening to a podcast by someone on BP. (Can’t mention his name because BP may delete this post) This guy kept talking about “the law of the first multi family (apartment complex) deal”. At first,I thought it was some superstitious nonsense. But I kept listening nonetheless. I also thought I’d need to go the syndication route to ever experience that law in my own life.Huge downpayment,multiple investors et al. Anyway, What I’ve found out is if we are determined enough,we will move mountains. So I pulled out all the dead equity that existed in all my duplexes in multiple cash out refys between May-July 2017. I put the entire $200k into a grade B 18-unit deal in a class A neighborhood in Cleveland OH. That deal closed in September 2017. This last month of July,2018,I closed on 2 small apartment complexes within a space of 2 weeks! A grade B 12-unit in a class C neighborhood of Jacksonville FL and a grade C 16-unit in Cleveland Heights,OH,a class B neighborhood. All the details and every last nuance of this crazy twin deal will be specifically detailed on my next blog post in the members’ blog section. I’m not a designated BP blogger,so you probably won’t find it “featured”.I will however link to it as a comment to this thread once it’s published. So,stay tuned. The law of the fist deal is real,folks! I’m living proof. So just do your first deal first!By hook or by crook. Finally,to the owner of that podcast,(you know yourself): Send me a PM.I’d love to come on your pod to tell your lucky listeners how right you are! And how awesome!! CA.

@Spencer Gray

The immediate play is to cut expenses by fixing exhorbitant Water/sewer bill.

Immediate planned rent increase by $100/unit as is still below market.

Near term interior repairs is mostly to satisfy point of sale requirement per the city.

We will resist over-renovating as there may not be enough return on the upswing in rent.

I’ve seen the data you referenced re declining population.It just doesn’t bother me a lot when you’re investing in a large metro.

I would be more concerned if you’re playing in secondary markets.

@Jeff Kehl

1/1962

2/Furnace/water heater 

3/Cleveland Hts

4/Our existing PM 

5/Sorry,we are using a private lender.

My bad.

6/Most interior repair is minor stuff like repairing rodent damage,small mold and paint/flooring in select units.

We anticipate about $150k in repairs when All said and done.

Immediate repairs/interior rehab approximate about a 3rd of that total.

Roof replacement accounts for the rest.

First thing that jumps out from the spreadsheet is no PM cost.

We are buying out of state,so will slap on the 8% PM fees.

Because we already own a similar building in town,we know the water and sewer bill is at least 2x what it should be.

So updating plumbing fixtures to reduce water utility portion is a major value play.

Rents are also at least $100 under market.

Financing is agency debt.

6.5% interest

3 year term,30 year amortization.

There’s a lot of moving parts in a value play.

That’s why I wanted your comments and questions first and i can respond as we go.

Here’s my latest blog post:

https://www.biggerpockets.com/blogs/8290/76279-it-s-all-3rd-grade-math?created=1

I’m looking forward to reading all your comments.