All Forum Posts by: Reed Meyer

@Alex Olson the 20-25% would come from a partner. No one lined up right now but I’d have to just figure that out. I figure if the deal is good enough I could find someone who’s willing to put down the money and get a preferred return. That’s assuming people will trust a first time investor even if it is a great deal.

How can I get started in medium multi-family without a track record? I am thinking the 16-20 unit range. Obviously need about ~75% loan from the bank and would need significant money from a partner for the down payment and rehab. 

I am looking at opportunities in areas with large rent disparity where we could go in and rehab that are already selling at around 6Cap. We could rehab these and increase rents by $100-$150 units each and force appreciation so the math works great. However, how can I convince the bank and a partner to get on board when I have no experience? Will a good, confident sales pitch and well organized, convincing OM be enough to get the money if it truly is that good of a deal?

Or is it truly a necessity to start small and get a 4 or 6 unit under my belt to prove myself before moving up to bigger deals? I really just want to jump into a big one first because I know that they'll take similar work upfront anyways and the higher unit counts are far more lucrative due to benefiting from economies of scale.

Thanks a lot. I'd love to get any and as much advice as possible!

@John Warren Thanks a lot John. I am interested in learning about anything over 12 units. I am not planning on buying anything soon as I am a new investor and plan on starting with 2 or 4 units and trading my way up but I would love to learn more about these bigger deals because that's my long-term goal. I know the big cash flow is in the bigger deals. I just messaged you with further info.

Does anyone have experience with large multi-family real estate in Chicago or surrounding suburbs? If so, I would love to connect with you and schedule a call to pick your brain and learn a little bit about your process.

Thanks

Does anyone have any recommendations for Multi-Family appraisal/valuation books? Or, if not a book, what resources do you recommend for me to improve my appraisal skills as I get into MF investing?

Thanks

I am learning more about wholesaling and it seems that DealMachine would be a really valuable tool. I would love to be able to create a motivated seller list that I could send direct mail to by filtering for remote owners and old age. Does DealMachine allow you to create lists like this? All I have seen on their site is that you can send direct mail to properties you see in person but I would love to increase my mailing list by being able to filter through categories I am interested in without ever needing to see the property.

Thanks!

I am currently looking at a property that is zoned as a single family but clearly looks like a multi-family residence. It has main floor with full kitchen, living room, 3 bedrooms, and bathroom and a garden unit with a full kitchen, living room, 3 bedrooms and bathroom. It has a staircase that leads down to the lower level with a door at the top that can be closed and it even has a separate entrance where you can enter the garden unit from the side of the house. Is there anyway to make this a multi-family residence or if it is zoned as a single family is that pretty much a done deal?

I am a new investor just graduating college and moving to Chicago in July. My plan is to save up this year and then purchase a property for a house-hack during the summer of 2021

I am rooming with 2 of my friends. However, just one of them wants to get involved in a house hack. So we will be looking for a 2 or 3-flat where we can live in a 3-room unit.

As I look in areas north of downtown (Avondale, Irving Park, Albany Park, Jefferson Park, Bucktown, Wicker Park, Lincoln Park, Lakeview, Wrigleyville, etc) I am finding that the numbers have not even come close to working. The monthly rent that we would get from the other unit(s) plus our one roommate always comes out to around $1,000 less than our monthly mortgage + expenses + mortgage insurance (mortgage insurance because we would be using a 3.5% FHA loan). And those are the best scenarios we've found. I am starting to think that there is no chance we find a property that offers positive cash flow for us but I would love to find something that results in closer to negative $200-$400 in cash flow per month. This would allow my friend and I to pay $100-$200 in "rent" versus the $800-$1000 we expect to pay this year while saving up. This rent improvement would make us feel that we have successfully house-hacked. Does anyone have any suggestions as to how we can change our approach to find a property that might make these numbers work better? Am I missing something when analyzing these numbers?

Our max down-payment would be $50k and in that scenario we would have no reserves.

I am a new investor just graduating college and moving to Chicago in July. My plan is to save up this year and then purchase a property for a house-hack during the summer of 2021

I am rooming with 2 of my friends. However, just one of them wants to get involved in a house hack. So we will be looking for a 2 or 3-flat where we can live in a 3-room unit. 

As I look in areas north of downtown (Avondale, Irving Park, Albany Park, Jefferson Park, Bucktown, Wicker Park, Lincoln Park, Lakeview, Wrigleyville, etc) I am finding that the numbers have not even come close to working. The monthly rent that we would get from the other unit(s) plus our one roommate always comes out to around $1,000 less than our monthly mortgage + expenses + mortgage insurance (mortgage insurance because we would be using a 3.5% FHA loan). And those are the best scenarios we've found. I am starting to think that there is no chance we find a property that offers positive cash flow for us but I would love to find something that results in closer to negative $200-$400 in cash flow per month. This would allow my friend and I to pay $100-$200 in "rent" versus the $800-$1000 we expect to pay this year while saving up. This rent improvement would make us feel that we have successfully house-hacked. Does anyone have any suggestions as to how we can change our approach to find a property that might make these numbers work better? Am I missing something when analyzing these numbers?

Our max down-payment would be $50k and in that scenario we would have no reserves.

@Patrick Menefee You’re the man. Thanks a lot. I have now added a lot of these to my list. I just finished the Miracle Morning and I started my morning SAVERS two days ago. I love it.