All Forum Posts by: John Jacobus

@Account Closed  I've listed a few books below that should help you understand the next steps.  If you are committed to forging ahead alone, it's worth spending time to shore up your knowledge base.  Alternatively, bring this deal to an experienced operator/deal sponsor and create a situation that would allow you to have a front row seat to learn how it's done while still allowing you to participate in the financial benefits of the deal.

Here are a few resources that I find valuable:

1.  What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures by Frank Gallinelli 

2.  Is This a Deal?: How to Analyze, Finance, and Manage a Multiplex

by Ben Leybovich

3. The ABCs of Real Estate Investing by Ken McElroy

4. The Ultimate Guide to Buying Apartment Buildings by Michael Blank

5. Wheelbarrow Profits by Jake & Gino

Marcus & Millichap's 2017 Multifamily Investment Forecast provides a list of high yield markets that may interest you.  Cleveland, Cincinati, Columbus, Kansas City, Indianapolis and Jacksonville are on the list.  While these markets may not meet the 2% rule in all cases, they are worth exploring.

The materials below are free after you create an account. M&M produces quality research and offers much more than the report below.  I recommend subscribing to their research publications.

http://www.marcusmillichap.com/research/researchre...

James Eng at Old Capital is great.  The team at Old Capital is very active in DFW, arranging financing for ~1/3rd of the Class C and B multifamily assets.  They are also active in Austin, Houston, and San Antonio.

The have a podcast, "Old Capital Reals Estate Investing Podcast", in which they interview active multifamily investors, brokers, agency lenders, and property managers.  It's excellent.

Welcome Raju!  The forums contain copious information that should help you find your way forward with multifamily investing.  I've shared some of my favorites below in an effort to provide an initial filter for you.

This thread contains a healthy discussion on the merits of various multifamily training programs:

https://www.biggerpockets.com/forums/432/topics/40...

Here are some great book recommendations on multifamily investing that should help deepen your understanding of the domain:

https://www.biggerpockets.com/forums/432/topics/40...

Here are some great podcasts that cover multifamily investing.  My personal favorites are Old Capital Real Estate Investing with Michael Becker and Paul Peebles, Lifetime Cashflow through Real Estate Investing with Rod Khleif, Bigger Pockets, The Best Real Estate Investing Advice Ever with Joe Fairless, Real Estate Investing for Cashflow with Kevin Bupp, Rental Property Owner & Real Estate Investor podcast, Wheelbarrow Profits with Jake & Gino, and Apartment Building Investing with Michael Blank. 

https://www.biggerpockets.com/forums/432/topics/40...

My recommended next steps are:

0. Set goals.  Clearly outline what you want to accomplish, by when, and why.  This will keep you focused.

1. Get educated by digging into the resources above.  This will take time to build your comfort level.

2.  Start connecting with others who currently do what you aspire to do.  Understand how you can help them and/or obtain guidance on how to get started.

3.  Build a team of brokers, lenders, and property managers.

4.  Take daily action: analyze deals, make offers, talk to owners/investors/brokers, drive for prospects, help others.  Whatever it is just focus on taking meaningful action every day toward your goals. The power of small daily action is tremendous.

Yes, I recommend James Eng, Paul Peebles, and Michael Becker from Old Capital Lending.  The team at Old Capital handles financing for ~1 in 3 class B & C multifamily properties in DFW.

They also host an excellent podcast.

@Jason Malabute I recommend that you find a few of Brandon Turner's recorded webinars in the BP archives covering the topic of deal analysis.  With a Pro membership, you have access to the archive of all webinars.  Watching a few of these webinars should help you with questions 2 & 3 above.

Regarding your first question, I recommend that you use LoopNet (www.loopnet.com) to find a few properties that interest you. While you won't find many good deals, and they won't always have all of the important details available, you can use the inputs in the marketing package to practice going through the motions. Once you get comfortable with the process and you find a deal worth pursuing, reach out to the listing broker and request the trailing twelve month financials ("T12") and current rent roll to get a better sense of the financial prospects of the property.

I also recommend a few books on this topic that should help you get comfortable with analyzing deals:

• The ABC's of Real Estate Investing by Ken McElroy (Chapter 7)
• The Ultimate Guide to Buying Apartment Buildings with Private Money by Michael Blank
• 13 Steps to Valuing Your First Multiplex by Ben Leybovich

Looking forward to seeing you in Denver, @David Thompson and @Joe Fairless.  I will be attending the BP event as well as the Best Ever Conference.  I'm flying in from NYC and am excited to hear about raising capital from international sources and connecting with the outstanding lineup of investors and operators that you have assembled!  

Growing up in the SF Bay Area, I have seen the intense interest in commercial real estate from international investors first hand.  I've always wondered what others in the C and B class multifamily arena are doing to connect international investors with opportunities.  I'm also curious about regulations and lessons learned from those who have explored this path.

I have heard many of the speakers on various podcasts throughout the multifamily investing community so it will be great to meet them in person.

Thanks for the great feedback.  

@Kenneth Reimer, your comment below gets to the key underlying driver behind my questions.  I value my reputation with brokers and don't want to consistently back out of contracts if I can make a reasonable evaluation prior to going into contract.  Thanks for your insight on this.

"Not only does that put you at risk of wasting massive amounts of time, but you may end up being known as the buyer that doesn't close, which could harm your ability to see other deals earlier than other investors."

Looking for experiences and thoughts from multifamily owners and investors:

Because property marketing packages can often times be misleading (i.e., understated expenses and vacancy; overstated rental revenue), it seems critical in my mind to get a better sense of the financial metrics BEFORE placing a property under contract.  Performing as much due diligence up front, before the official due diligence period begins, seems critical in my mind.  Without some visibility into the actuals of the property, it seems like an investor must make an uncomfortable leap of faith to place the property under contract.  Asking a potential buyer to place an earnest deposit at risk without providing at least some insight into actual financials seems unreasonable to me.    

With this in mind, what success have you had in obtaining 1-3 years of operating statements BEFORE moving forward with placing a property under contract? Is it unusual to ask for this information prior to submitting a LOI? How have you navigated when you have been faced with a broker-produced pro-forma and nothing else?

@Michael Johnson I have been happy with Cam Morrier's team at Occasio Realty.  They have managed my Scottsdale single family rental for the past ~8 years.  They just helped me through a rehab of the property which resulted in a $400/month increase in rental income.  They managed the entire process.  They are active in Glendale and North Phoenix.