All Forum Posts by: Andrew Schena

@Luke Carl what is the economic occupancy? How many of the tenants are paying rent? Did you get a rent roll and T12?

Converting to metered water can be expensive. If it’s a 1960s asset, you’ll want to make sure there is no aluminum wiring or at a minimum it’s been pigtailed at the outlets and switches for insurance purposes. But you can easily implement a RUBS payment based on a formula. Take 80% of the annual water/sewer bill, divide it by the square footage of the leasable area, and then multiply that figure by the size of the different unit configurations. Then divide it by 12 for each month. That is their non-negotiable monthly utilities charge. It’s paid prior to any lease payment, so if they don’t pay it, they’re then late on the rent because the rent payment has not yet been paid in full.  You implement over the next 12 mos as each lease renews.  

Cheaper than installing all new submetering. 

Good luck!

Andrew

@Zevi Arem just post about your business and your model. Post your past deals or deals you may currently already have funded and going, but NEVER post rates of return, equity percentages, and for the love of any God, say the word “Guaranty.” Just post about having success in your business and you’re looking to develop relationships with others who have interest in growing their money with real estate to contact you. You may get your current deal funded, you may not, but you should have clauses in your contract for that. The most important thing is to always be raising and trying to develop new relationships for when the next opportunity arises. Then you won’t be scrambling and you can put deals together with confidence.

Hello, my name is Andrew Schena and I am a real estate syndicator.  We have been very active in developing and renovating residential multi-family in the past 7 years here in Boston.  We have now pivoted our business model to include multifamily assets in emerging markets throughout the US. 

I would enjoy an opportunity to meet passive investors, and/or other operators, to build new relationships as our business expands, and have opportunities to showcase our investor base.  We typically use either a SEC Reg D 506 (b) or (c) exemption for our deals, so opportunities and specific details cannot be discussed until we have a relationship.  

We work with both accredited and sophisticated investors alike, and welcome a conversation with anyone looking to learn more about multifamily investing.  

Please email me if you are interested in connecting and learning more about us!

Thank you,

Andrew Schena

I’d look in Pawtucket before Woonsocket for sure. More future upside w T Station potential, and proximity to 95. Good call, and Good Luck!

@Raymond Hill I live in Blackstone, just north of Woonsocket. The city is in poor financial condition. Not to the level of Central Falls, but close enough. I don’t have BLS statistics on unemployment, but the city has been through the wringer, and nothing has really popped regarding a replacement for jobs. There are certainly pockets of good and bad, like anywhere else.  If you’re willing to weather the risk, the cash flow can be appealing.  

@Michael Le totally understood.  I am underwriting the properties separately, but it's difficult, because the seller runs them as a portfolio and is sharing costs across them.  I agree expenses for A Class should be closer to 40%, rather than the 64% he's operating at.  

At the end of the day, I was trying to figure out a way to be competitive on the deals by operating the property the way the seller does on paper.  I've been taught to have PM with R&M and Payroll.  This guy just runs Payroll and R&M, saving himself $48K/yr.  That 48K at these rates is a 800K value difference, which makes me less competitive.  They're good properties, and I'm trying to make my offer look best, as this is my first larger MF purchase.

@Dan Handford  that's the conclusion I came to as well instead of trying to bend myself into a pretzel trying to make my numbers work.  If it happens it happens.  This market across the board is incredibly frustrating to be buying your first larger MF...that's been my experience for the past 8 months.  

Thanks for the input gents.  

I'm currently looking at a 105 unit deal, which is comprised of 2 different assets.  One of the assets is Class A, and built 5 years ago.  The other property is a 70's product that just got repositioned to a Class B product 2 years ago.  The current owner is operating the properties without an actual "Management Fee", and simply pays a higher R&M expense, and simply pays the salaries of the employees in the Payroll Expense, across both properties.  The Payroll expense equals 6%, which is exactly what the Management Fee would be for this asset.  R&M expense is higher than average for these assets because of this as well, but it does save on paying the combination of Payroll + Management Fee + R&M.  

So, here are my questions:  Does anyone out there own any Class A/B that has seen this set up?  It would allow me to pay a higher price for the assets, and be more competitive, but am I being penny wise and pound foolish?  These would be 7-10 year holds, so in that time frame, as the assets age, am I going to start being better off running the assets traditionally as the R&M expenses begin to increase over time?  

I appreciate any feedback!  Thanks everyone.

@Kurt Jones is spot on. The syndicators, or General Partners, have uncovered the opportunity, and will be pro-actively managing it. For many syndicators, this is their active income stream, so they and their team technically trade their time and a portion of capital, for their return. The efforts of real estate syndicators are to find and provide opportunity to investors, also referred to as Limited Partners, that can achieve returns in line with their own portfolio investment goals, but through a tangible asset that many would consider safer, and certainly less volatile, than the stock market. 

Hey Courtney,

I'm assuming all the land behind that complex is owned by the current sellers, correct?  What's the feasability to add units, and would the market support it?  Do you get any Purdue students/business that far south?  

Thanks.

Best,

Andrew Schena

@Steve 

@Steve Lyman...you would pay the pref on their investment.  Then you would waterfall the equity split of/if anything is left over.