All Forum Posts by: Ryan Fisher

It is tough, but if you really want to purchase a property you will find the time. I found that by waking up only 30 minutes earlier each day, I can spend that time analyzing a few properties to get comfortable with the numbers, checking MLS, and going over new listings my realtor sends me.

I know I am still a newbie considering I only have one property, with another deal in the works, but I think getting up a little earlier could potentially help you. No magic formula haha

Good luck and let me know how it all goes when you get that first property!

How should you split profits to keep everybody happy?

Looking to go into a deal with my two partners (sister & father), who both have the cash and have both been wanting to get into multi-family investing.  The deal is a 4-unit multifamily apartment building that would net us $1000/month immediately, after factoring a conservative estimate of espenses.  This is in Cali, as everybody knows is very tough to find cash flow properties in good areas!!!

Would require approximately $100,000 initial investment (down payment, closing costs, repair).

I proposed this split with the initial investment as follows:

Me:            20%

Partner 1:  40%

Partner 2:  40%

With us all splitting profits equally at 33%.  They think I am getting to much in return even though I have done all of the work to analyze and basically hand this property to them.  Am I expecting too much, or do they have a fair point.

Would greatly appreciate the input...

The property was located in my hometown in Manteca, Ca.  Also, yes we did use a real estate agent and she told us that the sellers agent was offended by our second counter off. 

 Hopefully see you around considering I work in Santa Clara,  down the block from you. 

@Norma H. Hi Norma,

We figured $15,000 for a total remodel of one of the units including: flooring, cabinets, dishwasher, bathroom, etc. . And $20,000 for the roof because it looked like it has been neglected, and leaks were going through 2 of the units. Adding those up would have taken us to there counteroffer, but they said we were low-balling them. Do you think we should have "eaten" the costs, because such a good investment? Also what is your criteria when looking for SFR rentals? Looking to catch up :)

Congrats on the 3 SFR, and good luck in your search for that apartment complex!

@Eric M. @Katrina Edwards @Peter Amour

So it was a 4-unit apartment listed at $400,000.  All units were currently renting out for a total of $3,350/month.  As a conservative estimate including taxes, insurance, 5% vacancy, utilities, and repairs we would have been netting over $800/month.  Real good cash flow for our first foray in multifamily especially considering this is California.  Also, a lot of improvements and value could be added to increase the net cash flow.

Anyways, we offered $350,000, they countered at $375,000 and purchase in "as is" condition.  After walking through the property my partner and I decided one of the units would need a full remodel and the roof had leaks which that can mean big/expensive problems.   We came up with a counter of $340,000 in "as is" condition.   They declined our offer with no counter and are now out of the loop. (Unless their next offer falls through; keeping my fingers crossed)  Really frustrated with how we handled the situation, because even if we came a lot closer to that $375,000 we still would have been doing really well.  I guess you can always learn from your experiences but still does not take the sting away.

If we would have purchased at $375,000 here are my numbers:

Cap rate = 7.2%

ROI = 8.1%

Gross Rent Multiplier = 9.2 

The financing gets a little trickier for 4 units and above.  (All things I learned as I was going through this process.)  Need a minimum of 25% down in order to get a conventional loan.  Also because 4+ units your interest rate goes up dramatically.  Penalizes bigger investors in my opinion.  My partner and I had the downpayment and good enough credit to have qualified for a conventional loan if the deal would have gone through.

Also I randomly found it on the MLS.

What is your opinions on my way of handling offer and my numbers?  Can definitely learn a thing or two to get that second property.

Congrats!! Enjoy all of this new-found freedom.  You two are definitely motivation for a lot of us new investors!!

Have been scouring around for quite a while to find a good deal out in California, and I recently came upon a small apartment complex that is being sold in an estate sale.  As of a few minutes ago made my official offer.  All my numbers check out, so keeping my fingers crossed.

Anyways, Is there anything special that I need to know about when buying from an estate sale? Or is the process the same as buying any other property?

Pros and Cons of purchasing a multifamily property?

Not going to lie, I was nervous making the offer, because this is a big step up from SFR in my opinion.