All Forum Posts by: Stephen Brown

Part of what you are looking at is making an offer on the property. Usually sellers either leave capex out or put it below the line.

If you move it above the line then your offer is lower.

True NOI it's below the line.

But it is an expense, just like debt.

I didn't realize the site name would be blocked. Makes sense. If you want the site, PM me.

@Steve Lyman if I don't use Excel, I use Better Homes and Garden Designer software, it is based on Chief Architect

@Allen Lopez, I can only echo @Cara Lonsdale, @Alina Trigub, @Theo Hicks.

Bigger Pockets is the place to go for information. Be careful of Cap Rates given by the selling agent. And I prefer a different site to get single family values. http://www.*******************.com/  I realize if they get alot of press they will get sold and then it won't be free...but for now.

@Chai Jonn and @Leslie Chapman

I have downloaded the analyzer from @Tyler Kastelberg .

I also own the @Michael Blank one and the one from @Rod Khleif

I like them all.

Tyler's helped me do a quick calculation to see if it makes sense.

Rod's is a little more in depth, same excel but different format, and requires some more information.

Michael's is also similar to Rod's. Allows for refi's. Some of the rules of thumb are off, but allows you to compare a couple of scenarios.

They all have there place, and each has there short comings. But all work to help see if the deal even makes sense for your criteria.

As @Henry Perez says, he wants more deal flow.

I find that Deal Flow is easy but good deal flow is Hard. I see several deals a week just in the 3 markets in Ohio where we just purchased. But most sell with proforma, or all the value add is gone.

Hi @Charles LeMaire. My son began the process of Multifamilies a few years back based on teaching of @Michael Blank. He asked me to join his company and we went to a @Dave Lindahl event. He had already begun an email relationship with @Rod Khleif. We actually plunked down some money for coaching the Lindahl. Interestingly enough, the 'salesman' for Lindahl said he didn't think there was much they could teach us as my son had already had 2 LOI's accepted as well as my experience. We contracted on 101 units in Ohio and it was Rod Khleif's organization that sponsored us and got the deal done.

As far as teaching goes, I can't speak to Rod. I would assume that his coaching is good.

It wasn't until our deal in Ohio, when I moved to the property to get rehab off the ground that I learn of @Brad Sumrock. I learned of him through a man and wife that wanted to passively invest their money and really didn't want to be the sponsor.

I have found people in all the organizations that want to make the money and don't want to find the deals. Which is perfect for us. As we want to find the deals and then syndicate with others.

I have heard good things about Brad and will probably attend one f his 'bootcamps' next year.

As you said, don't move forward if you have no money or you have no drive.

Coaching can be great, if you work the coaching program. Almost regardless of who teaches it - because the basics are the basics.

But if you don't want to work then save your money - just look for sponsors/snydicators who can put your money to work. Within the next 24 months the market will begin to slide and deals will be more prevalent.

@Brennan Doherty IF you are comfortable with having your parents put their house on the line and IF your parents fully understand that they are putting their house on the line; I would suggest setting up an LLC to purchase and having your parents LOAN the money to the LLC before the purchase happens, with the promise that it will be secured by real estate as soon as you have a property. Then the money is sitting in the LLC account. You can pay their payments out of the LLC. Seasoning is not always an issue with commercial loans (over 5 units). You will probably have to sign personally on the loan whether at the beginning or at refinance and the bank may want to have someone with a higher net worth on the loan as well. IF you can buy the property with all cash, that would make refinance a heck of a lot easIER. And I cannot echo @Chris Jensen loud enough. Don't buy a property and assume you will be able to refinance all the money out of it. Buy the property after getting pretty hard bids on the rehab costs, and then aim for 70% of the expected ARV (NOI/Cap Rate (which a commercial broker can help you find out for the area)). That 5% (75%-70%) will go away quickly in closing costs.

A two year repayment may be a little quick, so I wouldn't promise it. Personally promise to make the HELOC payments. Plan on refinancing as soon as your ARV allows for a proper rehab. If the economy gets a little sahky then your projection won't materialize.

Most parents will say  "Sure honey, anything you want. I know you wouldn't do anything wrong." And it's true you wouldn't do anything wrong - but you  don't control the economy, the tenant traffic, the management company decisions, or the a myriad of other things. Make sure your parents know the risk. AND MAKE SURE YOU PERFORM FOR THEM, NO MATTER WHAT.

I know there are smarter and more experienced people out there than me, so please chime in.

@Hardik Patel @William Huston Not to sound like a politician, but I really didn't run the numbers out. I was just trying to explain why $100-$150 door is OK in a multifamily. The fact is my single family rentals cost me more per unit to manage than a multi. Plus when the single family has a vacancy, I am 100% vacant, when the multi has a vacancy it is partially vacant (5plex, 20%); so paying the mortgage is a bit easier. I currently own 10 SFR and plan on adding to that, but I do like multi's for their scale.

Also @William Huston, in your duplex example, I would buy the single family, though you still have a problem for management and vacancy.

I am usually dealing with 75 units and above, so I didn't take time to carefully calculate my numbers. Had I truly underwritten it I probably would have passed, unless there was a killer value add year 2. I like 8%-10% year one and 10%-14% COC year 2 through 5, with a 15-18% IRR.

I hope my initial recommendation on Multi Family has confused anyone.

@Matt Clark I love it! What was the cost of your "system"?