All Forum Posts by: Percy N.

(removing duplicated edited post)

@Brian Pownall what strengths are you looking to contribute to the syndication?

@Levi Bennett if you can finish construction and lease it up at market rents or better, that is probably going to give you the biggest return. 

You can then show the potential buyer the actual NOI.

@Levi Bennett are you looking to sell prior to construction and lease-up or post?

If post, then there is no need to offer a discount, the market will dictate the price based on the NOI and cap rate.

However, as you probably know, there is can be a big difference between the construction budget and actual costs. That is why development is risky and why you do not see smaller projects as there is not much padding to absorb any overages.

I took a look at the document linked in your post above. Do you have a more detailed breakdown of the expenses? A few expenses seem to be missing but could be bundled under a higher category.

Cheers

@Justin Goodin, there are many factors that qualify one as a "good" underwriter but I would say try to find someone who is familiar with the market and its expenses. e.g. how aggressive is the tax assessment? What is the typical rent growth? Rent to income ratios, etc.

We would offer to help but are in the midst of a $40mm deal and another $30mm in refi. In fact, we are looking for additional talented analysts to add to our (we are willing to train them).

Jump on @Brian Adams' offer, he is great ;-)

@Hassan O.,  the "Subject To" strategy is unlikely to work for large multifamily. Most lenders have a change in control clause which would trigger a default.

If you have the KPs for the loan identified for the deal, put the deal under contract and work on the equity. Don't forget the PPM and liquidity requirements most lenders will need.

The challenge will be finding a deal without experience since brokers and sellers want to see a track record, especially these days.

Engage an investor-friendly realtor who can get you that data. However, you have to show them that you are committed to a purchase.

Macro data on markets is also available through various sources on the Internet.

One easy/free source is to look at recently SOLD properties on sites like Zillow, Redfin, etc. All of them have direct links with MLS data sources.

Everyone seems to have a slightly different mechanism of calculating the splits, so I would reach out to them and see if they can walk you through the calculation.

We use an investor management platform that calculates the splits (to the penny), keeps an audit trail, tracks accrued distributions (if you are doing development or heavy value add), etc.

@Tony Nguyen, yes, for a 100+ unit property I would start with an established PM who knows the market, has established relationships, processes, resources, and systems in place. 

You still need to be careful about who you select as PM and that it is a good fit for your type of property and aligned with your goals for ownership.

Once you get to a point that you have or exceed the capabilities of the PM company, you can consider taking this on yourself but keep in mind it takes a lot of resources behind the scenes (accounting, technology, vendor mgt, etc) not just an onsite leasing and property maintenance.

Good luck with your journey.

What was the motel's average occupancy? If they scraped by with say 50% occupancy, that would be a lot lower than what an apartment occupancy should be.

Get professional advice to size this. If apartment units share hot water, they typically have boilers that are expensive to purchase and operate.

Also think about whether you intend to have the tenants pay for the utilities related to hot water and how that would be computed.