All Forum Posts by: Robert Rixer

Very confused. You say it's zoned as a quad but you're looking to re-zone it as a quad? It's listed as a duplex with 2 units currently rented and you're looking to occupy the remaining units?

You can offer whatever you want. If there's a 12-month lease in place, it may not be possible for the owner to perform on that but you won't know unless you ask. From a seller's perspective they may be reluctant, in case the deal falls through and then they're stuck with no tenants. So you should be prepared to put up higher, non-refundable EM. Good luck

I always say good financing doesn't turn a bad deal into a good deal. The financing terms look great but if the true value is $3M, you're $600k in the hole from day 1. Not saying it's the case here, but usually when I see great seller financing terms, it means the buyer is overpaying on purchase price.

As others said, it's local municipality specific - no one can give you a decisive answer here. 

Typically however, municipalities aren't trying to get owners to tear down buildings unless it's safety related. If they put a property into foreclosure, it's more likely to sit as an eye sore and not collect tax revenue.

Playing devil's advocate - give some additional thought to the condo conversion. Property taxes will go up versus keeping as apartments, you'll have to establish an HOA with reserves and you'll be at the mercy of the other condo owner. If they are not great people, they could make life a nightmare.

Capital raising and modeling are necessary but they're not competitive advantages. You need to drill down to the core of the business and ask yourself how are you actually adding value? There's 2 main ways to do this:

1) Figure out how to acquire deals below market price.

2) Figure out how to maximize NOI.

If you can do these 2 things better than most, you'll succeed.

"Crushing It: in multifamily and commercial Real Estate" is a great book for starting out in multifamily. A lot of great content on YouTube as others have mentioned.

At all costs, avoid "gurus" or paid seminars. Everything you need to learn the theory is out there for free. The rest you'll learn actually doing deals.

The best way to get interest is to find amazing deals. If you've identified market rate deals, you can do all the analytics in the world but no one will be interested.

You always have to ask, what is your competitive advantage over every one else doing this? For newer operators, the easiest way is to work very hard to uncover home run deals - which can overcome the lack of experience aspect.

It comes down to how easily you can get the ground floor retail leased, if it's not already. With mixed-use the cap rate to apply usually comes down to where the majority of the income comes from, the retail or the residential. With only 2 units it may be more 50/50. The retail should trade at a higher cap rate than multifamily so you want to make sure you aren't paying multi cap rates.

A lot of good answers already. I'll add that if the CapEx improves what you can get in rent, then this needs to be factored in. Unfortunately foundation, roof and new AC won't improve rents as they are expected basic needs. Interior CapEx like a new kitchen, flooring, etc. will garner higher rent.