All Forum Posts by: Will Wu

It's been a hell of a ride during the past 2 years. I started my real estate investor back in June 2012. Bought 12 Class B townhouses and started learning being a landlord, 3 months later bought 37 class D apartments. Another 6 later acquired another 56 units class D. Experienced first hand the challenges and drama of managing almost 100 units class D properties. Have seen it all. Now moving back to class B townhouses just closed 20 more townhouses all rented to Sec 8 tenants. Currently have under contract 30 more townhouses in affluent area of Wellington, FL. This year I plan to partner with a contractor to build 8 more townhouses and plan to sell the portfolio of class D properties for a 70% profit and now I'm thinking to buy commercial retail plaza or medical offices. Can anyone give me advice what I should do now with a budget of $4M cash? What are the advantages of owing residential townhomes vs comercial retails or medical offices?

If what they told you about having 14 on waiting list and all tenants are scored with good credit and 3x income is true. Then that definitely is not the same scenario as the low income properties I have. I'm just surprised Gardner has such a great demand? Mind to share why a small city like Gardner has such a demand for apartments?

Low income apartments generally will have vacancy rate of 20% as you will constantly have to deal with non paying tenants and evictions. Achieving 5% is very challenging not to say almost impossible. I personally manage 100 units of similar apartments in the city of West Palm Beach, FL which has 100k population vs 20k in Gardner. I think that deal you have its too expensive. We paid 40% of what your sellers is asking for a 56 units portfolio of 2beds apartments thiw week with annual rental of $360k. If you can't get 15% ROI in low income properties it is not a great deal unless there is room for equity growth.

I have many sec 8 tenants and this is the first time I have to deal with incompetent HAP from the City of Miami Beach. Tenant moved in October. Due to some internal communication between the case agent and account payables they have not paid me the rent for October yet. They paid November and December already. When I called them to inquiry when will I get paid the overdue payment the person in charge just replied rudely "I  will pay it when I process it". That was 10 days ago and we have not received this payment yet. According to the contract between me and HAP if the delay the payment without reason for more than 2 months they will have to pay late payments. I have sent them email asking them to pay immediately plus late fees or I will have to move on to evicting this tenant due to their organization not being able to pay the rent due for 2 months. What do you suggest me to do in case these government workers still don't care about taking care of this situation promptly?

If someone has 20 multi families buildings (around 100 apartments) that are currently held on several LLC's. How can he 1031 to other properties? Since those LLC's are all independent entities and each building has its own folio and address is there a way to do it one 1 single transaction instead of doing it all separately? Can anyone with experience on 1031 teach me how to perform this transaction?

Originally posted by @Kirk R.:

Hi Will,

Hope you are enjoying the nice weather down in FL.  I'm vacationing to FL Beginning of Nov.

She keeps committing and not following through, which is embarrassing for most people.  It might not be her 100% decision.

She could be playing games.  How many siblings did she have?  I would guess there a multiple attornies because another sister or brother.  Maybe contact the other sister or brother?  Or the executor of the estate or going through probate.  Others are much more skilled in this area than I am.  Just a thought.  Sounds like you will have to be patient.  Again I think you are playing in a space most people don't play so there might not be that much competition.  Have you researched the property ownership?   

She does not have siblings and she is the only President of the LLC's that owns the properties. The properties sole owner is her company. There must be some kind of legal problems that is holding her. Her lack of communication is what is killing this deal. Whatever the problem if she is interested to do the deal she should be more upfront in giving details of what is happening.

8 days after my post. I'd like to share my experience with this seller. Many have criticized me for pushing her too hard. I followed the suggestions and stopped calling her (maybe 1 time every 2-3 days). But I did sent her an email asking if all was OK with the purchase agreement and if she needed any assistance from me. Here was her reply on Oct. 15: 

"I feel that this offer is good for all. My feeling is YES, but again, I am awaiting authorization from both attorneys. I will be speaking with mine again around 9:30 today, and he will be receiving the acceptance from the other attorney before giving me the okay to sign the contract. I am hoping that it will be today so that we can move forward quickly. I am sorry that things aren’t as immediate as we BOTH would like, so please bear with me. Thanks."

It looked pretty positive and I understood she has more than one attorney to review a pretty basic standard sales contract. I then gave her a few days more and followed with another email asking her if all was OK and if she is still interested to close the deal and if she needed any assistance from me. 

Here was her reply on Oct. 19. 

"......And yes, your offer is ready to go...I just need that final clearance. Thanks again for all your patience." 

So at this point 2 weeks has passed since I sent her my sales contract. I replied her by asking if it will be helpful so set up a meeting to meet her with the attorneys to clarify any issues they might have since I might not be able to secure the funds for much longer if I could not get any confirmation that this deal will go. 

No more replies whatsoever. From Oct 15 till Oct 24 I called her maybe 2 or 3 times and sent her around 4 emails. Left message and she never replied any. It is my conclusion that this seller is playing games with me and I'm used as a back up offer for her to negotiate with others. I seldom see sellers that constantly confirm the deal is a go but they don't seem to want to go or don't seem to send any hints that they might want to negotiate better price or terms. Lesson learned. A seller may tell you we are good to go but will never mean it. When they start acting out of normal that should be a red flag. All of other excuses like being overwhelmed, etc. Truly are just BS for me. If you want to close a deal you will find to close it. Period. 

I recently engaged into negotiating the purchase of a lot in Miami that is zoned for building 2 multi-families fourplexes. The developer sold me 3 fourplexes a year ago and offered me this vacant lot to built additional 2 if I wanted. I've been very happy with the high cap rate of the fourplex as well as the 20% valuation of the properties in one year. I'm totally new to construction, the developer is a gentleman on his 70's and he retired last year and has no wish to engage into another construction project. He will introduce me to his architects and builders so they can walk me thru the whole process. I have no experience whatsoever in buying lands and constructions. I'm hoping any developers can give me tips on what I should be aware of and what questions should I ask when interviewing the architects/builders?

Originally posted by @Account Closed:

Its not about what car you drive or watch you wear. Its about living within or below your means. I drive a fancy car, have a nice watch, take nice vacations and wouldn't want to live like many of you describe here. Life is about living.

A few years ago I used to drive only luxury cars because it was a dream to own these things when I was poor. I though I achieved my dream when I have several houses and cars. For some reason it did not gave me any happiness and I always wanted the next better car to the point I was changing new cards every year and of course loosing a lot on money on depreciation. I did not care about it because I have enough income at that time but those luxurious possessions did not gave me happiness for more than a few weeks. After owning them you get used to it and that happy feeling fades away fast. It really did not made my life a bit happier to have a Rolex or a fancy car at all. I'm actually happier now driving my economic Honda Civic Hybrid that replaced my Lexus LS460. It saves twice money on gas and maintenance. My goal in real estate is to be able to have a stable income that can allow me to live the life I wanted. Not to buy luxurious things. I'm frugal in materials things. I don't like to buy things anymore unless I need them (not want them). The less I own the simpler my life will be and thus it will allow my mind to focus on the things that really gives me pleasure (family and friends). Always keep it as simple as possible. That is my new motto in life. Most of my furniture I get them at Ikea and it's great not to need to pay $1500 for a dinner table when you can get it for $180 at Ikea. I do spend a lot of money traveling with my family and the memories we create will stay forever in our minds. I'm 41 and I'm blessed to have lived in more than 10 countries and travelled to more than 50 countries so far. It's totally worth the money I spend. I like the idea of accumulate good memories and experiences, not stuff. Yes. Life is about living. For me living is living in the moment and have the financial freedom to go and enjoy good food (not necessary expensive food) and go anywhere you want whenever you feel like it. It's a great lifestyle and I'm very blessed to be able to achieve it with the income my investments provide me. 

Eviction records is the most important thing to check when screening a tenant. I consider it more important than criminal or credit check. If a tenant has a prior eviction I don't hesitate for a second to reject the applicant. If all landlords 100% reject all tenants with prior eviction then they will treat being evicted as a very very serious matter and start placing paying rent on time as their top priority on their to pay bills list. Most tenants they will always consider paying their, utilities, cable, internet, even nail polish before paying the rent. I use rent application.net it cost $20 to check for eviction and criminal records and $15 more if you want to check credit score.