All Forum Posts by: Rivers Plowden

Need to do some networking. Looking to share some coffee with other Greenville folk this week. Please feel free to contact me.

-Rivers

Who are are getting financing through? If it's a local/regional bank, it will most likely be recourse. Not something I would stress over if this is your first deal. I think you can get into a Freddie Mac loan without the experience requirement, but I can't tell you the loan amount limits off the top of my head. For Fannie Mae, you would have to meet the experience requirements. Otherwise, I think it's pretty difficult to get a non-recourse from a local lender. Others will know more about the agency loans than myself.

If it's a value add opportunity, you can always try to finance through a local bank with a recourse and then after you have repositioned the property, refinance to an agency non-recourse loan.

Regardless, I don't think the recourse part should turn you away, unless of course you have malicious intentions.

It will work wherever you can find a deal. It just may be harder in some places compared to others. It may not be as easy as having a realtor bring you a deal. You may have to speak with a number of realtors in order to find one that is willing and familiar with what you are looking for. As others have said, your best bet is to find something you can get well below ARV, rehab it, and then rent. Educate yourself as much as you can. Look up the BRRRR strategy if you aren't already familiar. Network with as many realtors as you can in this area. Try to find some wholesalers in the area as they may be in better tune to the deals you are looking for.

What @Jason Burr said. Prices are up right now. You may want to call some wholesalers and see if they can bring you something. Or maybe do your own mail campaign. The problem is that I don't think you can buy a list in SC. You'd have to find another way to find buyers either by driving for dollars, signs, etc. 

I have a property that I am underwriting that I received from a broker as an off-market listing. I would like to call the PM for the property and ask some questions about how it is managed. I've tried to ask the broker, but they haven't returned my email just yet. I want to make sure this won't be stepping on toes or creating any sort of conflict.  

I'm probably over-thinking this, but afraid of making an amateur mistake.

Thanks.

@Jacob Allen Check out Upstate REIA. I haven't had a chance to attend any meetings just yet, but they put on several every month on various subjects in addition to the main monthly meeting.

@Sam Grooms, great reply and info! I really appreciate your time and thoroughness.

Without going to a realtor or the MLS, you can look at previous sales on Zillow, Realtor.com, and Trulia to see what has sold in your area recently. If you know of one that maybe isn't listed there that has sold and is similar to your property, you can look it up in the county tax records to see what it sold for.

Don't skip closing costs. This often doesn't get mentioned in big picture discussions, but are significant costs when purchasing a property and need to be considered in your out-of-pocket costs. Talk to your lender and realtor to get accurate closing costs. You should receive an estimate of these from a lender.

I have been analyzing apartment deals and doing a lot of reading/listening/studying and have an assortment of questions that I hope some seasoned MF investors can help answer. Sorry if this is a little long, but I'm really looking for some specific techniques and strategies if you have them for the following.

1. As cap rates get compressed and interest rates continue to rise, are you trying to target a certain spread? Is there a number to look for here or a number where you are just saying, "this isn't going to work?" Or is it more of just whether the cash flow meets target ROI?

2. When underwriting/analyzing a property... what do you use for expenses and vacancy? Specifically, what are some things that can be gleaned from a T-12 to help with your numbers. I don't like general rules of thumb all the time such as just using 50% for expenses and 95% vacancy. Yes, I understand that each of those are not at all conservative and are dependent on different factors and that's what I'm trying to get at. I'm a numbers guy and I like to get as specific as I can.

3. What other things are red flags from the T-12 or rent roll? What can I look for? What are some opportunities to add value or decrease expenses?

4. How do you plan capital reserves and working capital? What do most lenders require for reserves? How do you plan to fund reserves after purchase? Is it so much $ per door per year depending on property condition? What other ways can you plan this?

5. How do you know when you can afford third party property management? I keep hearing people say they want a property large enough to support this, but what are you looking for? Obviously, you put it in the underwriting, but how should I be planning this and what should I be looking for?

6. If you can support third party management, what other payroll can be expected? What do PMs NOT provide? Will you have to have your own office manager, maintenance, etc? What is a typical number for these positions?

7. What does the buying process look like? I'm familiar with making offers and closing on residential properties. However, I keep only getting pieces here and there of the MF process. LOI, acceptance, due diligence.... when does earnest/hard money go down? Are there any contingencies on getting this back if something comes up as in a residential deal (inspection, environmental, non-compliance, etc.)? I'm assuming earnest money goes towards the down payment.

8. Finally, any tips on getting a broker to take you seriously?  I have spoken with some, but having not closed an MF deal, I don't get much respect and that seems to being the going norm. However, I have developed specific criteria, and will be sending that out. But, what else have you done to gain brokers' respect and attention prior to closing a deal?

I appreciate any answers and especially, everyone's time. I could have sent this to just one person, but I know there are so many on here with lots of different approaches to these subjects. 

Thanks, 

Rivers