All Forum Posts by: Stevan Garcia

Sorry for the delay.  Just quickly put this together @. Short by 1% so far on the projected return of 6.1%. however, we have completed all our value added capital improvements and have lots of momentum in the market. Houston added the most jobs in the US in 2018 and consistently adds population at double the national growth rate. As a result we have see a gradual uptick in occupancy and rents since acquiring the property. Over next 12 months projected to hit about $190K Net Op Income. This is the cool thing about apartments as income determines value. If CAP rates hold at about 6.5% then we could exit at $2,923,077. We acquired property for $2,150,000 with $40K repair credit. $2,923,077-($2,150,000-$40,000)= $813,077 of Equity created or 108% return on equity in just 2.5 years! And that doesn't even include cash Flow! I could never create that kind of wealth for myself (or others) with my single family rentals. I have made more friends with multifamily since now I can share the benefits with many others. With single family I feel selfish as it only benefits me.

Thanks Matthew.  I started small with single family investments but love the economies of scale that multifamily offers and for a bout the same amount of work regarding acquisition and asset management.   Now that I know both sides of the equation, big and small, my personal preference will continue to be geared towards bigger deals.  Just sharing my experiences as I continue to evolve as an investor and with so many ways to profit from real estate it all comes down to ones preference and style.  I personally feel that it doesn't matter what you do as long as you are doing something but at this point in my career I would still say "Go as Big as you Can as Fast as you Can!"

thank you and best of luck to wherever your path leads, big or small!

Hi Kevin!  Thank you!  Yes it was off market.  Called quite a few brokers and built relationship with a the one who broker the this deal.  Always looking for more!

thank you Kenneth!  

Investment Info:

Large multi-family (5+ units) buy & hold investment in Alvin.

Purchase price: $2,150,000
Cash invested: $750,000

40 Unit C-class Garden Style Apartment complex purchased in B/C area with strong economic momentum, operational and physical value add strategies that will realize cash flow and equity growth.

What made you interested in investing in this type of deal?

I wanted to build economies of scale to maximize cash flow and profits with as man doors as possible at one address.

How did you find this deal and how did you negotiate it?

I found this deal by calling commercial real estate brokers who specialize in smaller multifamily deals. I had a strong sponsor who's track record I Ieveraged to impress upon the broker that I can close. We performed due diligence on the property and successfully negotiated a $40K repair credit from the seller. We closed when we said we would 90 days later for a smooth transaction.

How did you finance this deal?

We got a Freddie Mac small balance loan with 25% down, 30 year amortization, 5 year term with 1st year interest only at 4.85%.

How did you add value to the deal?

We took advantage of economic momentum, operational and physical value plays.

What was the outcome?

We are turning those value plays into enhanced net operating income forcing asset appreciation and value upon exit at end of year 5.

Lessons learned? Challenges?

Don't delay value added strategies. Implement value added strategies right away or enhanced net operating income and value will be delayed.

Investment Info:

Single-family residence buy & hold investment in Spring Hill.

Purchase price: $110,000
Cash invested: $30,000

Nice cash flow property with modest appreciation.

What made you interested in investing in this type of deal?

Tampa Bay was bottoming out in 2013 and I knew I would be in a good position to take advantage of improving market conditions. This property has generated strong cash flow returns and would be a great buy and hold investment anchored with an excellent loan on the property. Appreciation is luck-warm.

How did you find this deal and how did you negotiate it?

This is the only property I have purchased sight unseen. I researched NARPM website to find well recommended property managers and asked for references from property managers to find good real estate brokers. Always asking for references to build a strong local real estate power team!

How did you finance this deal?

Conventional 30 year fixed mortgage with 20% down.

How did you add value to the deal?

Updated whole house with laminated wood flooring, kitchen backsplash, new paint with accent walls and stainless steel appliance package.

What was the outcome?

Making over almost $500 cash flow per month.

Lessons learned? Challenges?

This time I didn't see the property before I bought it. I ended up with the best house in an OK neighborhood. I should have tried to get an OK product in a great neighborhood to add value. This is a good lesson learnt as the downside is modest appreciation but great cash flow. It is an oversight that I can live with.

Investment Info:

Single-family residence buy & hold investment in Phoenix.

Purchase price: $107,000
Cash invested: $30,000
Sale price: $205,000

Great momentum property purchased at the right time in a strong market.

What made you interested in investing in this type of deal?

Phoenix had a lot of single family inventory after the sub-prime mortgage crisis and I bought a text book rental property as this market bottomed out. I rode the wave of recovery as strong population and job growth brought stability to house pricing and rental income growth.

How did you find this deal and how did you negotiate it?

I used a real estate network from Los Angeles to make contact with a Phoenix turn-key operator. The introduction was smooth and the transaction seamless.

How did you finance this deal?

Conventional financing with 20% down, 30 year fixed mortgage.

How did you add value to the deal?

I found a great property management company that streamlined operations making me a lot of money throughout the life and exit of investment.

What was the outcome?

I exited with over $100K in cash flow and capital gains realizing 56% annualized returns.

Lessons learned? Challenges?

Buy low, sell high! And if you can buy more when a strong momentum market bottoms out!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Valentines Sales & Property Management in Phoenix, AZ.

Investment Info:

Single-family residence buy & hold investment in Forney.

Purchase price: $145,000
Cash invested: $15,000
Sale price: $195,000

Second investment property purchased just outside Dallas, TX. In 9 years I made $65K between cash flow and capital gains. I exited with 48% annualized returns.

What made you interested in investing in this type of deal?

New construction in the path of progress of an exploding market fueled by strong population and job growth.

How did you find this deal and how did you negotiate it?

Broker relationship put me in contact with builder with inventory to unload and applicable discounts.

How did you finance this deal?

Conventional 10% Down 30 year fixed mortgage with PMI.

How did you add value to the deal?

New construction in growth area of Dallas metroplex.

What was the outcome?

I exited in 9 years with 48% annualized returns.

Lessons learned? Challenges?

It doesn't matter when you buy as long as it is a good property within a market with strong supply-demand fundamentals.

Investment Info:

Single-family residence buy & hold investment in Keller.

Purchase price: $143,000
Cash invested: $2,000
Sale price: $179,000

My first investment I made approximately $50K between cash flow and capital gains over 9 years on a $2K earnest money deposit. This a 278% annualized return! Difficult to do this today on new construction!

What made you interested in investing in this type of deal?

No money down on new construction!

How did you find this deal and how did you negotiate it?

Made contact with local real estate agent, flew to Dallas and closed deal.

How did you finance this deal?

Loose lending standards of 2006 allowed me to get an 80% LTV first mortgage and a 20% second with a $2,000 earnest money deposit.

How did you add value to the deal?

New construction in the path of progress of a strong market.

What was the outcome?

I exited 9 years later with 278% annualized returns.

Lessons learned? Challenges?

You can always make money in real estate if you choose the right property in the right market irrespective of the credit cycle.