All Forum Posts by: Ryan Hayhurst

@Todd Dexheimer Todd, that was a great article, thanks for publishing. Based on your analysis what would list as the top 5 markets to invest in smaller MFs (< 50 units)?

@Remington Lyman

I have not purchased in Columbus but I have looked at a few properties there on LoopNet and Crexi, but am unfamiliar with all the areas. Do you regularly see good deals that produce good cahflow from day one?

I have also looked a little at Des Moines but again, unfamiliar with the area to know which pockets are good and which are not. I will tease arch both markets a little deeper.

@Micheal Briscoe I saw the package of I think 7 duplexes and a triplex on 21st but I’m really looking for a few more doors under one roof, hopefully 5+ unit buildings. Would love to find some 12-24 unit type complexes. I’ve seen some driving around and will probably start doing some mailings, but if OKC is really that competitive for small MF, I’m open to investing out of state. Just curious if the BP community has any favorite markets for these types of investments.

I live and invest in Oklahoma City, but most of the seasoned professionals in the local area that are on BP say that OKC is a notoriously difficult place to find good deals in small MF's. There doesn't seem to be much available supply and a lot of demand so it appears there is very low cash flow per door in small MF vs SF. I am considering doing some BRRR SF deals but I currently want to scale faster than SF can allow so want to stick with a MF strategy for now (always willing to shift in the future if necessary). I will continue to beat the bush and search for deals locally, but I am also willing to invest out of state for better small MF deals.

With that said, what is the best market out there today to investment in small (5-50) multifamily properties for cash flow and long term wealth creation?

I only have one 11 unit MF in OKC. 10 units occupied with 1 under renovation. During the closing process, there was one tenant that didn’t pay for a month claim Covid hardship and left before I took over. That’s the 1 vacant unit once and it is now being renovated. The remaining 10 tenants I inherited paid on time in July.

From what I have read and others have said this divide between high and low collection ‘% seems to be directly correlated to the local govt’s hostility towards landlords and the misconception that all landlords are “rich”. The more they vilify those that provide housing and tell their citizens it is ok to skip rent, the more the average person will think it’s ok and no negative consequences (which there will be). I’m in OK and we are a very pro landlord state and I have not heard many people skipping rent, collections remain relatively normal.

In many ways unfortunately, it seems like it’s the big “blue” cities like in CA, Chicago, NYC, etc that are having the collection problems and generally speaking the smaller “red” cities seems to be doing better.

@Daniel Villanueva I’m certainly no expert, but I believe anything 5+ units will be considered commercial while 1-4 units is normally considered residential, at least for loan purposes. I would consider my 11 unit a small multifamily rather than an apartment complex, but I don’t know how many units you would have to have before being considered an apartment complex.

@Daniel Villanueva You can definitely start with MF and it doesn’t have to be a massive 200 unit property to start. I’ve restarted my real estate investing career with a small 11 unit multifamily. I owned about 10 SF long ago but sold them all about 15yrs ago. Owning a MF definitely takes a different skill set than SF, but it is way easier to manage 11units in one spot than all over town. The ability to scale and control/force appreciation are the main reasons I got into MF. I would plan to buy larger complexes but wanted to learn and make whatever mistakes I may make on a smaller deal first. I don’t plan on taking investor money, but that could change.

Too many people I know talk about it, read about it, think about it, worry about it and dream about it, but never do it. The key is to find a deal that works for you and get started.

@Rocco Swinney I wish it was more creative, but I just did a traditional commercial loan with a local community bank that was a referral from the selling broker. It was 4.25% on a 20yr AM with a 3yr balloon. My plan is to get the rents up, expenses down and refi in the next few years to pull my equity back out. It’s my first deal so we’ll see if I can execute. 😉

@Nathan G. Nathan G is spot on. I recent bought an 11 unit from an out of state buyer that just wanted out. I have since been shown an off market 8 unit MF plus some sf’s from an older couple that live in another city in same state but are ready to get out of the rental business. All their properties are in great shape and they were well managed. So they just want to move on to another stage in life or retire or something else. I’m not really sure exactly why they want to sell, but it doesn’t sound like it’s anything bad related to their properties or tenants. From what I hear talking to brokers and others, this is very common. And the best thing about some older owners that have had their properties for a while is they often have below market rents since they maybe cash flowing so haven’t felt the need to raise rents to keep up with the market.

@Alyssa Dyer Thanks Alyssa! I have been in touch with your colleague Kiera Underwood and let her know I’m in the market for these types of properties just in case any pop up.