All Forum Posts by: Ramsey Blankenship

@Denver J Lobo

Take a look at your portfolio and figure out which property you should sale. Do a 1031 into the next property. This allows you to use any capital gains / depreciation recapture / and state tax as leverage to own a larger, better property.

I recommend getting into multi-family to really scale up. Once you are over 5 units per property - you need commercial lending which has separate limitations.

Under contract for a Multi-Unit complex in which the seller resides. The seller has become bed-ridden and it seems very serious. We discovered the severity of the issue in a very abrupt, odd way. 

Our team scheduled an inspection of the entire premises, to include the owners living quarters.  As per our contract, it is mandated we have access to all premises before the inspection contingency deadline. As communicated and scheduled - our team, the listing agent, and maintenance person arrived for inspection. The owner self-manages and uses the units as weekly rentals without leases.   

Of the 17 units, we were able to access 6 and complete a formal inspection on one. Tenants were in the units and were not notified, therefore we did not have the authorization to interrupt their day to do full inspections.

Then it hit us - "GET THE F*** OFF MY GD PROPERTY!" screeeeaaaamed across the courtyard! The sellers wife lost her mind. She kicked the inspector off the roof and yelled everyone - to include their listing agent, off of the property. It was the weirdest thing I have ever witnessed.

I do not know the details, but the seller is sick - COVID is a thing - and I can understand limiting exposure during this time --------BUT, we communicated EVERYTHING clearly, paid $1,700 for an inspection, lined up a contracting company, and did exactly what we said we were going to do. A simple - "Hey we have a medical issue going on, please stay away from these spaces at this time" would have worked. 

Either way - emotions removed - I have three major concerns:

1. If the seller does pass away - what happens? I imagine it depends on how his estate is set up - if it is.

2. If we do close, and the seller is unable to move out because of illness, do I refuse to close until they can vacate? - that could take months/years

3. If the seller tries to back out of the contract because priorities have shifted - not to be insensitive - but we have spent a lot of time and resources on this project - what are my options. My fear is the downward spiral of taking a seller to court while they are going through this. But in my defense, I am simply trying to buy something this person is selling. 

Any advice would be much appreciated.

-Ramsey

@Lisa Gauff - I live in San Diego and invest in the SouthEast where properties have the ability to cash flow AND appreciate at  reasonable rates.  A $500k loan can buy a good amount of real estate.  Here are my suggestions step by step.

1.) Conduct Market research: population increase (+20% over 20 years), Median Household Income (+30% over 20 years), median household/condo value ( around 40% over 20 years), crime rates trending downward but not higher than 550, and lastly - Job growth in the past 12 months.

*This information can be found on city-data.com, or google.

2.) Establish relationships with brokers within the market. Log into Loopnet.com, click on a multifamily listing, open the OM, scroll to the bottom and find the Listing agents name. This broker will have access to other listings. Dont ask for pocket listings, simply tell him/her what you are interested in and follow up.  When they have listings, they will likely send them your way.

3.) Learn to under-right deals.  Go through rent rolls and OMs to find acronyms you do not understand. Figure out what they mean and understand how they returns are calculated.  When deals come to you, you will eventually build a process to quickly vet deals while focusing your time on the good ones.

4.) visit the market you are interested in. Meet with brokers, property managers, lenders ect.  Get a feel for the neighborhoods, city projects, attractions, and amenities.  Understand where the line between blue-collar and delinquency is. 

5.) find the property which meets your demographics, income requirements, and budget.  Make an offer and eventually get it under contract. Work through your due diligence period to confirm you are buying the property as it was advertised. 

6.) Close on the property and set up your management team. 

If none of this sounds like what you want to do - consider being a limited partner in a syndication. PM me if you want to know more.

Ramsey

My Off-market success strategies have been identified in this thread, however, I have a quick tip for folks to find decent deals for On-Market Listings. This is how I started and is much more comfortable for a beginner:  

The real estate websites (Realtor, Trulia, Zillow) have an option to select multifamily in filters. When you do this, you will see what everyone else looking for multifamily sees.  

TRY THIS - select single-family, however, limit your search to 5+ bedrooms and 5+ bathrooms listings.  

Go to "List View" and scroll through the listings. 

You will quickly be able to identify the difference between a mansion and a multi-family property.

I have purchased two apartment complexes sitting on the MLS for over a year simply because the listing did not show up in multi-family. I offered well below asking and quickly closed. Just a tip for those who stay up late searching these sites.

Ramsey

@Alexander Johnosn I will not be living in the area. Once we identify the market we intend to invest in, my partner and I will begin to develop our team. 

@Louis Porter Jr. 6 weeks to find a tenant does not seem quick. I may be used to the multifamily realm where tenants move in with a week or two of vacancy. I am sure SFH takes longer.

@Pete Harper Do your units stay rented or do you struggle with vacancies and/or turnovers? Also, are your units SFH or MF?

Here are the Macro Economics:

Population growth since 2000: 22%

Median HH income increase since 2000: 18% (on the lower end, however, the college has a huge influence on this)

Medina Home Value increase since 2000: 48%

Crime:  This city has cleaned itself up in a MAJOR way. Unlike any in the country (Crime cut in half since 2000) in fact, LA and New york cities conducted case studies on Bryan Tx. to use as a template for reducing crime.

Job Growth: 1.41%  (this is for the College Station /Bryan MSA)

All in all - very good signs for a healthy city with many reasons to invest capital.

Here is what scares me:  There is an enormous amount of multi-family inventory on the market. Too much. I believe this is due to student housing growth when Texas A&M increases its capacity to 80,000 students.  From a distance, it appears construction has slowed however population increase has not.  

Any experts in Bryan willing to provide some insight on the direction Bryan is headed? M

My partners and I are looking to invest some capital into some smaller, stable, Multi-Unit apartments (5-20 units) with short term rental potential.

Interested to hear the feedback.

Here are the macroeconomics for Tallahassee:

Population Growth since 2000: 20%

Median HH Income increase since 2000: 30%

Median HH Value Increase since 2000: 50%

Crime: Just below the national average and slowly trending downward (484 of 1000)

Job growth (12 months): 3.2%  (highest in the Panhandle of Florida)

All in all, Tallahassee appears to be a healthy, prosperous, city.

Are there any local experts who would like to share the ground truth.  My partner and I are looking to purchase stable multi-family units with short term rental potential (walkability).  Class b and C only. 

Interested to hear your thoughts.

Ramsey

Luther,  Thank you for the response. would you have time to jump on a phone call? my partner and I are narrowing our research this week and Kansas City is a top contender for our investments. 

Ramsey