All Forum Posts by: Steve Olson

Hi Nick Deutsch , welcome! I'm working on a townhouse project/Fourplex project in Spring. Would love to hear what you're developing and compare notes.

Hi @Brian Burke,

Very cool thread you've opened up here!  Some awesome points and it will bring some great discussion.  I'm slammed today so if I repeat anything here sorry...but I wanted to chime in. 

I do think that while this can be analyzed on the metro basis, there are submarkets that make sense within those metros.  I won't get into that here, but I'll share some stuff I heard on a webinar put on by CoStar last week. The title of the webinar was the future of the multi family market. 

The bottom line was this: builders for multi fam (and single) have been focusing on the high margin luxury stuff. That gives them the best margin.  But even though the economy is recovering from an employment stand point, wage growth is largely stagnant.  So those focusing on higher end properties, regardless of market, are going to feel it in a higher vacancy rate and lower rents. 

The opportunity is in "affordable" multi fam housing, and that was universally agreed to by the economists on the webinar.  If you're dealing in that, you're going to have a very good couple of years ahead of you because that's what people can afford and there just isn't enough of it.  I focus on new construction fourplex developments in the Salt Lake City, Houston, and Boise metros.  We also have the possibility of expanding into the Phoenix metro here in the next 12 months.  I'm sure that there are cases that could be made as to why each of these areas is great...or not so great, but the neighborhoods we've picked and the rent we target (usually between 1300-1700/mo) is in that good affordable range that we think there is demand in.  So it was good to see that CoStar agrees: if you can effectively invest in the affordable stuff from a tenant perspective, there will almost always be demand for your product.  

Good luck in your search! 

Hi @Khari Harper, great question!  I can help with some general knowledge here, but there may be some specifics for New Jersey that you'll need to check into with an attorney in NJ.  

If bottom line is if you can service the mortgage (because that will still be due) + any additional payment the seller requires for the seller financing, it could work.  Sometimes you'll get a seller that just wants out, so all you'll need to do is service the mortgage with no additional payments.  

Once title transfers, that mortgage lien stays with the property and would be paid off when you go to refinance.  

There is of course, all the typical "due on sale" clause stuff, meaning the bank could in theory call the mortgage due if the seller transfers title to you.  I won't pretend to be an attorney on that...I'll just tell you I've done it and that banks usually don't mind as long as the payment is being made.  

One trick too...you'll need to make sure you get the insurance straightened out.  The mortgagee (bank) will want an insurance policy on file and if the seller sold the property, they can no longer get insurance on it.  So when YOU go take out the insurance, the policy will be in your name and the bank may have questions and heartburn over that when all of the sudden a policy shows up that's not in the name of the borrower they have on file.  

Some people on here have done this a lot and can likely give you some great input, but these are a few things that I have found are useful to think about.  Good luck to you! 

Hi Ian and welcome! I may be able to assist on new construction small multi family in the Houston metro. I've helped many from Southern California put their money to work out of state. PM me if you'd like more info. Good luck!

HI @Chrystal Browning, yeah I do know of a few possibilities but I'm not sure if they'll jive with the timing of your 1031 or not.  Being new construction, that can be tricky.  Sending you a PM now.  Thanks!  @Desmond Alexander, sending you a PM as well.  

Hi Elena K. Lor , great question! It's all about the numbers. I actually rep a builder who builds new fourplexes in Utah, Idaho, and Texas. I help clients run this scenario all the time. I'd be happy to plug the numbers into our software for you to see what pulling that equity out would do to your payment versus what it would generate on cash flow. PM me if you'd like to chat. Good luck!

I second Dave Foster . I've had many clients do this. Just have to use the EAT like he said.

I recommend Ben Lieberman. Met him though the title company I used and he's been my guy ever since. Has drafted all my trust deeds, promissory notes, releases, lead agreements, etc. He gets it. Has also got me out of a few jams. I don't know Jax Petty personally but have a friend who has used him and seems to like him. Message me if you'd like an intro to Ben. Happy to help.

Hi Travis Hayes , I rep a builder who builds new construction 4plexes, 3plexes, and 2plexes in Utah, Idaho, and.....Houston. They are a town home style fourplex (basically 4 townhouses in a row with one tax ID). The current project we are doing is in Spring, right near the intersection of Gosling and Kuykendahl. We're probably on the higher end because of area new construction, but if you're looking for something like this shoot me a message. Good luck!

Welcome @Wesley Rich!  Time to network your guts out.  Good luck!  Houston is an awesome market.