All Forum Posts by: Omar Ruiz

Apartment Complex in Growing Texas City •  New Upcoming Investment Webinar

I’d like to invite you to an upcoming live webinar regarding our new investment opportunity which features a 10%-13% Average Annual Return on Investment on a 200 Unit Apartment Complex located in Texas. 

We believe this investment is well-positioned to produce outsized returns to our investors given the that we successfully own and operate a 100-unit Apartment Complex across the street and can cure the existing mismanagement.

This Investment is suitable for accredited investors. If your an accredited investor and interested in receiving the property package outlining the property and deal specifics, send me an email at [email protected]

You can also send me a direct message on BiggerPockets.

The webinar will be taking place on Thursday, February 1st from 6pm to 6:30pm pacific time, and you will be required to register prior to joining.

Please registration for the webinar click HERE

We are very excited to present this opportunity to our investors given the unique aspects of the opportunity.

Here are a few things we’ll cover on the webinar:

• How we're assuming an existing low rate 3.49% loan that protects investors capital

• How We’ll Increase Value by Reducing Expenses & Improving Management

• Our Strategic Advantage Already Owning 100 Units Across the Street

After the presentation, the deal sponsors will answer live Q&A from the audience.

I hope to see you there.

Please Click Here to Register 

Please note that you must register to attend.

See you soon.

The Ultimate Retirement Plan
By: Dmitriy Fomichenko

Can you control your retirement account so that you can write checks from it, without penalties? Yes, you can and Dmitriy Fomichenko from Sense Financial Services will educate us on creating The Ultimate Retirement Plan – The Solo 401k. He will share the following topics:

• Solo 401k VS. Self-directed IRA
• Prohibited Transactions
• Case Study
• Non-recourse Financing and more…

Dmitriy Fomichenko is President of Sense Financial Services. He started his career in financial planning and real estate investing in 2000. He now owns multiple investment properties in various states and has spoken to audiences and mentored hundreds of investors at investment & financial planning seminars. Dmitriy founded Sense Financial to help clients maximize investment returns while protecting their hard-earned money utilizing self-directed retirement accounts: Checkbook IRA and Solo 401k. He is very passionate about helping families and individuals achieve financial freedom.

I've seen more distressed deals in the last 6 months than I've seen in the last 6 years.

We were invited to speak at the Private Lending Masters Club. This event is being hosted by Janice Bell and her club.

We were invited to speak at the Private Lending Masters Club. This event is being hosted by Janice Bell and her club.

Investing in Apartments • Proforma vs. Results • A Full Cycle Case Study

Omar Ruiz and his partner Jeffrey Spindler invest in Value Add Apartment Complexes in Texas. Their company is called LeRu Investments LLC. Since 2010, they've owned house rentals and apartments in three different states and own a property management company in Orange County California.

They will discuss a full cycle apartment complex they just sold and exited. They’ll compare their original proforma with actual returns. You don't want to miss their insights into the real grit of the deal. They will discuss the following topics:

· The Hallmarks of a True Value-Add Deal (Not Broker’s Version)
· Scrutinizing Income Statements
· Refinancing and Cashing Out Investors
· Infinite Rate of Return Example
· Real Life Stories from the Trenches

We will discuss various investment accounts and ways to use those accounts to invest in real estate. You will learn the pros and cons of real estate vs. stock investments plus being the owner versus the lender or passive equity partner on a property. We will discuss various custodial companies that host your self-directed investment accounts, and hear from guest speakers in the private lending and syndication arena.
• What to bring
Smart phone or tablet, or a notebook and pen.

Thank you @Michael Kinsella !

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $340,000
Cash invested: $80,000
Sale price: $590,000

This was a fix & flip, rehab on small single family home in good neighborhood of Long Beach, California. We saw the potential in the numbers to turn a nice profit, but didn't anticipate the length of time to get the tenants out. We had to be patient with the wholesaler and everyone involved.

What made you interested in investing in this type of deal?

The profit potential. Acquiring at a good price. Because of the tenant situation we felt that we were the right buyers for this deal as most people didn't want to deal with tenants due to the covid restrictions on evictions. We felt that deals that are more challenging would eliminate competition and present greater profits.

How did you find this deal and how did you negotiate it?

The deal was from a wholesaler. The issue was that tenants living there were not paying rent. It was difficult for them to find a new place and move out. We stayed patient with the wholesaler and after several months we split a cash for keys offer with the wholesaler to motivate the tenants to move out.

How did you finance this deal?

Hard money loan and private investors we've worked with in the past.

How did you add value to the deal?

We gutted and rehabbed entire home. Installed new roof and exterior paint with some siding. New grass and electricity in the garage. In the interior all new floors, kitchen, bath, drywall, paint , electrical, plumbing, appliances. We reconfigured the kitchen layout by removing separating walls to create an open concept kitchen and add walking space. We hired a designer that presented an idea of a peninsula counter top seating area. We also added washer/dryer hook ups.

What was the outcome?

We home came out looking fantastic and we increased the value to be able to sell at $590,000 from a purchase price of $340,0000. We made a nice profit and our investors got a good return.

Lessons learned? Challenges?

Our initial contractor started of great, but over time spread himself thin and caused delays. We fired him and finished the job with a new crew that has worked with us on other projects ever since.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Arbor One Escrow is a great company that's very investor friendly. Pivotal Capital was our hard money lender.

@Brittany Barchalk

If you're not accredited, then you need to work with syndicators that work with sophisticated investors. Even that needs to be vetted and documented along with a pre-existing relationship (documented conversations, phone call, meetings, etc.). That may be you or may not, but there is a way to level up to that. Feel free to reach out and I can explain.

If you have multiple properties, especially multifamily then having an LLC is recommended.

You stated transferring the "property", so I'm assuming a single property. It's is a single family home (SFR) I don't think the extra expense eating into your cashflow makes sense, especially with the extra coverages you mentioned. If you're worried about protecting your personal assets on a SFR you can increase the coverage amount.

If you're talking about a multifamily, then getting an LLC makes more sense.

*NOTE: With an LLC you need to get an EIN and file a tax return for the LLC, which adds to the expenses.

@Jacob Sloop 

Glad you liked it. 

Thanks!

@Doug Spence 

We sold in 2018 for two reasons:

1 - We were starting to do bigger deals (32 units, 70 units, 100 units) with economies of scale and better cashflow. The property eventually became too small (13 units) as we grew, but at the time it was an exciting opportunity and awesome learning environment. I never regret having that experience and taping into our abilities to find creative solutions. 

2 - It didn't fit our long-term strategy of owning B & C class properties. The property started as a D class property in a D neighborhood. We rehabbed it to be as close to a C property as possible but you can't change the neighborhood by owning one property. This was a lesson we learned - we could only affect what was on our property, so the fencing was essential to take control of the immediate environment and improve our street and neighbor next door. The neighborhood and overall situation was too management intensive and the property was too small for us to continue putting the focus it required. The right owner is a self-manager/live-in operator that can focus a majority of their time on it as it wasn't producing enough cashflow to hire 3rd party mgmt. 

We didn't consider refinancing because after 5 years, we had learned a lot and we were looking for bigger properties. Keep in mind that when refinancing, you need to do a cost/benefit analysis and take into consideration the higher mortgage and monthly payments. For us it was just time to close the chapter on that book and continue to grow to bigger things. 

As far as next projects, we're focusing on our value-add plan on a recent 104 unit deal in Texas. We plan on purchasing more properties in the surrounding area. I'll probably talk about this deal at a virtual online presentation next month for the Orange County Investment Club that I run. I invite you to check it out. Let me know and I'll send you a link. 

Best Regards,

Omar