All Forum Posts by: Shafi Noss

Hey @Ben Leybovich, surprised you're not disagreeing with @Brian Burke again! It must be really great information.

Just a typo there--this was a curiosity question from a friend, I don't actually have a deal in mind. Fixed now :)

@Brian Burke Understood. A few others were giving a 2.0 multiple, but your experience is that's at the high end. I'll pass on. 

Hi everyone, the point about keeping goals in mind is well taken. This time we really were just curious about the equity multiple + taxes (even as a fringe benefit) and based on @Taylor L., @Lane Kawaoka and @Brian Burke it seems like that aims to be around 2.0 plus extras over 5 years. Very helpful! Thank you.

Hi everyone,

I was talking with an investor friend the other day and he asked me a question I didn't have an answer for. He asked "So if I were to invest 100k in a multifamily deal, how much would I make total over a 5 year investment?"

Of course this varies greatly deal to deal. But he was trying to get at the fact that there are a lot of pieces to a syndication: cashflow, tax advantages, value add, loan pay-down, and appreciation over time. What I couldn't quite answer is what do these look like, ballpark, bundled together?

For example:

If he invested 100k for 5 years receiving an 8% preferred return on a value add property at an income of 200k, what would that look like for him? Here's a calculation to give an idea of what I mean:

-40k cash from cashflow
-5.5k tax benefits from depreciation (100k / 27years x 5years x %30 tax bracket)
-100k cash on sale
-10k cash on sale for the 2%(?) appreciation per year
-20k (?) on sale for value add
Total: $185k over 5 years == $37k per year

I know this isn't perfect, maybe its not even a good approximation. Does anyone have a sense of what would be a good estimate from an investors perspective?


Thanks very much,
Shafi

Hi BP,

I’m looking for advice on finding my first multifamily deal.

A partner and I have about 300k to work with, 200 from investors, and we want to either (1) find a deal with decent cashflow and buy and hold to gain experience for the next deal or (2) buy from a mom and pop operator and do some small value add to gain experience for the next deal.

The issue is finding a deal, I’ve heard Loopnet has low quality deals and brokers won’t take you seriously until you have a track record.

Our main goal is to gain experience and a track record to move up to larger deals, do you have any thoughts on how to break in and find a first deal?

Yeah that’s been my impression too, but I hear Texas is a fantastic market right now. Since we’re both in the area, I’d be interested in meeting up and trading notes sometime. Either way I’ll message you if I happen to run into any good deals in NoVa.

@Chris Coleman it's not where we were looking, but we're certainly open to it. I see you're based in the DMV, do you have any insights into properties down here?

Thanks for the advice everyone. @David Almeida, makes sense to me and I know Joe Fairless' knows his stuff, so I'll check out that book @Travis Watts.

Great advice, @Greg Scully, sounds like you're saying the risk is low enough that a value-add is an option in the 5-10 unit range from a mom and pop, so maybe we'll look there. Thanks for the thoughts guys.

Hey there,

I'd like to get your opinion on a strategy for transitioning into multifamily. A partner and I will have about 300k (partly from us partly from investors) to invest come January, we both have some experience with single family, but value-add apartment buildings are our end goal. We haven't done a multifamily deal before so we're thinking of buying a 5-10 unit, high cap rate multifamily that requires little value add, learn the basics, get a bit of a track record, and then go bigger on our next project.

What do you think? Is it a good use of money? What should we offer investors since there is no value add? Is it a good strategy? Any other thoughts or advice?

--Shafi