All Forum Posts by: Scott Morongell

I'm not 100% sure how to get on their lists but I would think attending meetups or simply going on meetupsdotcom and registering for local meetups in the area you'd like to see deals in would be a good start. I would dm every person that is in those real estate meetup groups asking if they know any wholesalers in that market. 

@Gabriel Daneliuc I've never built but I'd much rather have cashflow day 1 even if it doesn't hit your 1% rule metric than to speculate, build, lease-up, and hope you can achieve market rents. Those who have issues holding onto deals is normally due to inadequate cash flow. 

@Jay Helms I have attended both. You have 2 camps of people who attend, summits, seminars, webinars, meetups, conferences, etc. Camp 1, those who are trying to learn and come for the info. Camp 2, those already know the business and want to network. The issue with virtual is that it eliminates the reading, touch, body language, and connection to potentially find a business partner or your next investor. 

@Frank Bonzai there is a lot of information out there in apartment books, podcasts, and even youtube to learn the basics of analyzing an apartment deal. As others have mentioned you could pay for a mentor or coach, however spending a lot of money for them to teach the basics may not be the best use of your money and time. Your other option is to find an operator and partner on a deal where you bring the capital and they will underwrite and operate it. 

@Gisselle Mendez a lot of it would depend on what type of apartment you are looking to live in. Brand new with lots of amenities or maybe something that is older but had been updated. Once you figure out what level of apartment and size bedroom you want I would look at 4-5 in that area and ask them for today's rates. Since it's such a loaded and speculative question the only way to figure out roughly what the rent might be is to take today's market rent and add 3-5% rent growth for each year till your reach 2023-2024. This should give you a rough estimate. 

@Maria Felix I would suggest the mls if you have around 60k. I'm not sure how far that will get you in NYC. Might want to look outside of NYC into a suburb. You could also get on some wholesalers list as the might get duplexes or smaller multifamilies into their pipeline. 

You're a passive investor chomping at the bit to invest passively. You see a headline come through on your email with an offering - ONLY 50% leverage, smoking DEAL! But is it? 

As a syndicator and also passive investor myself I see this time and time again today with the market relatively close to the top. A sponsor (syndicator) is dying to tell you how conservative they are because of the low leverage. What they neglect to tell you is that their DSCR is slammed to the floor at 1.25 (traditional agency, is diff for bridge and local banks). This essentially tells me that they're willing to pay about (20-25%) premium more than it's really worth. In order to pay such a premium for a value-add deal which is what most sponsors are buying they need to be in a fantastic market where cap rates will stay lower on an exit with a rent bump on rehabbed units somewhere around 300+. I haven't seen a deal have 300+ rent pops and if it did, I surely wouldn't underwrite to it.

Passive investors beware. Just because a sponsor is telling you how conservative the leverage is doesn't mean it's a great deal. Debt service coverage ratio is more important and should be looked at in conjunction with leverage on a deal. There are many other factors to determine if a deal makes sense to passively invest in but this will give you a good start. If you're wondering what those other factors might be you will want to look at (by year or month) the assumptions they made for: rent growth, expense growth, delinquency rates, additional income in place and being added, exit cap, debt placed on deal, potential debt prepayment, RUBS, etc. Two of the biggest factors that move numbers on a deal are rent assumptions and exit cap.

@Paul David a little late to the party but hard money or private money (family member or friend). Which option did you decide to roll with?

I am not familiar with brokers in this area however I'd set up a google aleart like "Norfolk apartments". I'd do that for each one of the areas you're interested in. Over time, you can get google updates on deals that are trading and the articles will show you the active brokers in that area.

@James Ahern I agree with @Taylor L. you need a strong idea of the basics and fundamentals before getting a coach/mentor. Paying someone to teach you the basics is not the best use of your money and time. You can certainly do the business without a mentor or coach but may take you longer to achieve your goals. 

I always suggest for someone to work for a sponsor that is actively doing deals. This will accelerate your learning curve and give your real-life situations to learn from instead of staring at spreadsheets and hypothetical situations.