All Forum Posts by: Account Closed

@Danny Johnson, Thanks Danny.  I recently signed up my team to use REIMobile and the feedback is very positive so far. Looking forward seeing the investor facing reports soon.  

@Danny Johnson, Would I have the ability to print out investor brochures to provide to potential JV partners or private money lenders?...similar to what you get from the BP Flip Calculator. If not any plans to add that feature in the near future?

@Account Closed most of the feedback you received so far is spot on. The combination of taxes, interest rate and the LTV on the loan is what's putting you in a negative cash flow situation. That being said you still have a good deal in your hands and there are ways you can still improve the cash situation.

For starters, you shouldn't be paying 10% for property management.  I have small units in Westchester that I am paying 4.5%.  Send me a PM and I'll introduce you to the property management company that I use.  

In terms of the loan, I always work with a community bank that understands the BRRR strategy and can close pretty quickly without requiring seasoning. What I can usually get them to do is to get a 75% LTV loan as soon as I've stabilized the property and take out the hard money guy. The caveat is that since I have not fully seasoned the property they will keep the extra equity in an escrow account and release it once I have seasoned the property. This allows me to get the best rate, take out the expensive money quickly and still unlock my additional equity a few months later. Try reaching out to Thompkins Mahopac Bank for a refinance.

In terms of operational efficiency, you should look into converting to individually metered gas heat. In Westchester I am seeing 25%-30% savings on my heating costs. The buildings in my portfolio that don't yet have gas heat are in the process of being converted as we speak. It will cost you a bit upfront but it will significantly improve your NOI which directly impacts the value of your property.

Lastly, look into doing a cost segregation study for the property.  It'll allow you to accelerate a good chuck of your depreciation which will put more money into your pockets.

I am based in NY and most of my properties are in Westchester.  Feel free to PM me if you'd like to connect and troubleshoot a bit deeper.  

Ruben

@Mark Choi you shouldn't be embarrassed to ask anything on BP, learning is the whole reason the vast majority of us are on here!

When it comes to deal syndication the Sponsor is the person putting together the deal.  That can involve not only finding the deal but also underwriting the deal, negotiating the terms with the seller, locking down the deal with a down-payment, due diligence, securing debt financing, selling the deal to investors and actively managing the asset post closing to guarantee the highest return for investors.  The fees already discussed is the compensation for the sponsor taking on all of these activities. 

Some times some deals will have co-sponsors.  For example I am currently syndicating a deal where I am taking on all of the above activities but my co-sponsor is bringing in the capital that we need to co-invest with our investors and the liquidity and balance sheet required for the size of the loan needed from the bank.   In this case we split the fees 50/50.

@Lawrence L. Every area has its plus and minuses.  At the Yonkers Owners Association meeting last night someone brought up the fact that taxes are higher in Mount Vernon but it's much easier than Yonkers to evict tenants if the need arises.  In Yonkers our water bill has also risen by some insane amount over the last few years.   Those are things that for the most part none of us can control so focus on finding solid deals with strong cash flows, regardless of the town.

@Bryant Hull did you end up end up finding a company to acquire?  If so how did you end up valuing the acquisition?

Curious because I am starting discussions to with my third party management company to buy a stake of the business.

@David Battle, Yes.  The two resources I shared are great starting points.  Go through those first so that when you are able to connect with a mentor you won't be asking to be taught the basics.  There are a lot of folks that are willing to help, but you have to do your homework first.

@David Battle also check out the "Apartment Building Investing with Michael Blank" Podcast.   His podcast is focused on all the topics related to syndicating multi-family deals, with a special focus on helping beginners get started.

You may also want to check out "It's a Whole New Business:  The how-to book of syndicated investment real estate" by Gene Trowbridge.  It's available on Amazon it's a great book to help you get your head wrapped around the ins and outs of syndication's.

@Brian Pulaski that's interesting Brian.  With some of the multi-family rehabs I can get 3 very different prices.  I have started working with a broker in my area that does all the leg work for me, but he's also just focused on commercial deals.  He won't look at any of my vacant rehab properties.

@Matthew Allen, I am glad I could help.

@Andrew Choi some of my first time investors will ask for a list of up to 6 investors that have previously invested in some of my deals.  They call those investors and some have even gone as far as asking those investors for their references or for the contacts of other investors they know that have worked with me in the past.  They take that extra step to make sure that I am not just giving them phony references.

It's also important to ask for the list of projects that they have completed in the last 24-36 months.  Go visit those projects, many are happy to give you a tour of existing properties.  Also speak to the banks involved in those deals.

One last and often overlooked but super important step is to conduct criminal background check as well as run the credit report.  You're not looking for minor violations, what you're interested in is any fraud related records, bankruptcies or signs of financial distress. 

Best of Luck!