All Forum Posts by: Ryan Spearman

 Being out of country the biggest question you want to ask yourself is how much work you want to put into land lording. There are pros and cons to the two schools of thought: higher risk lower price assets in middle states VS low risk higher priced assets on the coasts. A third option if youre looking for true passive income could be to invest in a syndication  

Hi @Ryan Spearman

Looks like you've got a lot of good info here, if you haven't noticed, every investor will happily point out the best parts of their particular market (it's this weird 'My market is the best market' mentality investors seems to have')

Where should I buy?

You need to establish some goals or criteria before answering this question, you can make money in every market in the US. Here are some questions I'd be asking myself:

-  At the commercial multifamily level, everything SHOULD cash flow if underwritten correctly. What's more important to you, cash flow or appreciation? There is a natural tradeoff here

- Do I want to asset to be in a city or area I'd like to visit? Or do I not care personally about the location?

- Do I want to invest in a competitive market (going to be more work to find a deal) or invest in 'overlooked' markets where brokers, sellers, and agents will give me more attention?

How Big?

If you can buy up to $1.6M purchase price and renovation and want to buy a single asset, you're looking at the 8 - 26 unit range depending on the market and how distressed the asset is. I would recommend buying a single asset as you can scale operations easier and devote attention to one building.

Finding a Team

I'm going to be honest with you here, the odds of you messing up your first multifamily deal while investing from abroad is much higher than a local investing in multifamily who has done a few deals already in that market.

I would recommend finding some syndication groups you like who buy smaller deals and coming in as a $50k or $100k limited partner so you can observe and learn. Then, when you start looking for your own deals to run, you can general partner with the syndication group you've gotten to know and they can help you run the deal successfully.

Minnesota is a fantastic option for what you are looking to do. My partners and I have 25 unit apartment complex we own in Rochester MN. The nice part about MN is that there is a perfect opportunity to cashflow...create some value with value add potential...and then cash out when complete. This is our current strategy with the 25 unit. 

The market obviously is different from city to city but while you do your research I would look into the following:

Saint Cloud MN, Minneapolis/Saint Paul MN, and Rochester MN

I want to insert comments on a few of the above statements. 

1. Saying that "Rustbelt has no upside" is nonsense; I have many friends that invest in the "Rustbelt," and all of their deals have an upside and force appreciation. Note: some parts of the Rust Belt are areas that, In my opinion, are not Landlord friendly enough and have a high cost of living. So not my first choice to invest in. 

2. @Ryan Spearman Yes, that's why I started investing in USA Multifamily 5 years ago. No cash flow in NZ unless you are buying Commercial Real Estate NNN with a higher yield. New Zealand is a tough place to invest because borrowing money is VERY DIFFICULT, and you don't get a Big Banng for your Buck.

3. 10% Net Cap is something that you need to understand. In the US @Ryan Spearman we are calculating returns differently. Especially with Multifamily, which is based on NOI. Up t about 4 Months ago, Yes, it was easy to Cashflow with 100% financing. I did two cashout refinancing over one property in the last two years, and even after pulling few hundred thousand out, the property cash flowed pretty much the same. We call it the refi and role strategy or the BRRRR.

3. A: Now that rates are 7%-8% (and going higher) High, double-digit Cashflow is harder to achieve within the first year until the property is fully stabilized. 

3:B: 100% financing is Not a strategy for beginners in a correcting, volatile, trading downward market. Or with negative sentiment. 

I hope that helps!

 I know dozens and dozens of investors from overseas that have never even been to the city where their house is and are not involved with anything, Team handles all. Heck I only go to Cleveland twice a year, during the warm months all is handled for me. 

"Rust belt has no upside " You obviously have not been paying attention the last10 years. Pricing has more than doubled, tripled or more in the Cleveland markets. Forbes had Cleveland as the #1 rental market for 17 - 18, but they too were not paying attention. We used to be able to get 25- 30% or more NET caps with pricing from 30- 35k SF, and 10k per unit for MF. Now 10% net caps are to be had with pricing from 90kish, SF and 45-65k MF. per unit. Even 2021 Forbes still has the Cleveland markets in the top 5. I just recently picked up a SF 3/2 in a nice area all in 63k, values 125k, rent will be about $1350. 4 unit all in 130k, rents will be 750/ 850 per unit. 10 UNIT all in 350k, rents will be about 90k gross with a net of about 60k, 17% net ish. 4 unit all in 115k, rents will be not less than 800 each. 

Its ALL about knowledge and your team

Good luck 

I have been working with out of the country investors for about 10 years and have yet to find any bank that will finance them. They all say you must have a US address and bank account. So I am not sure how you are getting funding? 

Is it true Australia is better than New Zealand? Somebody told me that.