All Forum Posts by: Travis Limbocker

@Steven D. sent you a DM.

@Carrick Young I imagine you're asking what "part" of San Jose? The property is downtown close to Diridon Station. Happy to walk through more details if you're interested. Feel free to DM me.

Investment Info:

Small multi-family (2-4 units) hard money loan investment in Kansas City.

Purchase price: $102,000
Cash invested: $64,000

Contributors:
Robert Musallam

Acquisition and Exit Strategy: BRRRR. Financing: Hard Money. Business Plan: Complete repositioning of historic duplex in gentrifying submarket in KCMO.

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

The proximity of the property to a transitioning submarket was our initial interest. Upon further due diligence we discovered a lot of investment activity in this particular neighborhood.

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

Local broker who invest himself in the submarket in question.

How did you finance this deal?

Hard money loan

How did you add value to the deal?

Complete rehabilitation of both units. Big capital overhaul, upgrading HVAC, water heaters, electrical, roof, etc.. New kitchens, bathrooms, bedrooms and flooring. New external / internal paint. New fixtures. Modern amenities.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Kansas City.

Purchase price: $145,000
Sale price: $183,500

Contributors:
Robert Musallam

Acquisition and exit strategy: Buy and Hold. Financing: Traditional: Business Plan: acquire turnkey and learn how to be a landlord

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

First purchase was a duplex. Line of thinking was, "why not double up on the next purchase?"

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

Same turnkey provider that we worked with to acquire our first duplex, had a contractor and real estate investor partner on the ground in KCMO. With my business partners, we flew to KCMO to meet that contractor and he informed us he had an upcoming fourplex available while having a drink with him and his wife. Agreed on a buy price without any brokers or third parties.

How did you finance this deal?

Traditional financing with the same lender as our first duplex.

What was the outcome?

Ended up selling the property as a package with another Duplex when we discovered natural appreciation would provide us a good return. The profit was tagged for scaling out commercial real estate endeavors.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Kansas City.

Purchase price: $145,000
Sale price: $183,500

Contributors:
Robert Musallam

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

First purchase was a duplex. Line of thinking was, "why not double up on the next purchase?"

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

Same turnkey provider that we worked with to acquire our first duplex, had a contractor and real estate investor partner on the ground in KCMO. With my business partners, we flew to KCMO to meet that contractor and he informed us he had an upcoming fourplex available while having a drink with him and his wife. Agreed on a buy price without any brokers or third parties.

How did you finance this deal?

Traditional financing with the same lender as our first duplex.

What was the outcome?

Ended up selling the property as a package with another Duplex when we discovered natural appreciation would provide us a good return. The profit was tagged for scaling out commercial real estate endeavors.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Kansas City.

Purchase price: $135,000
Cash invested: $5,000
Sale price: $153,000

Contributors:
Robert Musallam

Started our (my wife and best friend) investment career by purchasing a turnkey property in Kansas City, MO. This was the "springboard" property that ignited the passion to continue growing our business.

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

Wanted an easy starting point to real estate investing without many barriers to entry.

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

Through my business partner's real estate network we met a broker who focused on proving turnkey real estate properties in the Midwest to California-based investors. Used our personal savings to acquire.

How did you finance this deal?

Traditional 75% LTV financing.

How did you add value to the deal?

Turnkey property required very little work. We implemented professional property management to ensure property operations and great tenants.

What was the outcome?

Ended up selling the property after seeing some appreciation that we weren't originally projecting.

Lessons learned? Challenges?

Small MF is great but for almost the same level of effort, you can purchase larger, commercial properties. This property really provided the justification for us to scale out business quickly by focusing on commercial assets.

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

DM me for recommendations

Investment Info:

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

Purchase price: $1,272,000
Cash invested: $250,000

Contributors:
Robert Musallam

100% Seller financed deal. Complete rehab turn around in 12 months, $250k. Refinanced out @ $1.272M and paid off seller. CoC ~21%.....in the Bay Area!

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $825,000
Cash invested: $200,000

Contributors:
Robert Musallam

Acquisition and Exit Strategy: BRRRR. Financing: Traditional via local portfolio lender. Business plan: Rehab all 24 units to achieve fair market rents over 5 year hold period. Upgrade units with complete HVAC systems and new water heaters. New external paint and landscaping. Implement professional property management. Achieve new income streams with existing storage units and laundry room.

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

Seeing the benefits of scale through larger, commercial asset classes.

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

Local broker. Flew out to local market, met Broker and Property Mgt firm, worked with them to identify the right project.

How did you finance this deal?

Traditional financing via a local portfolio lender, leveraging partnership member equity for both acquisition and rehab costs.

How did you add value to the deal?

Currently completing rehab of final phase of units. New property mgt with systems put in place.

What was the outcome?

Still in process

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

DM me for recommendations

@Noah Gregory we completed a rehab at the end of February for one of our duplexes in Kansas City, MO and had our PM team begin listing/showing right when the Coronavirus situation got real. We had a decent amount of interest and ended up filling unit #1 and are about to have a new lease signed for unit #2. We own a 24 unit in Tucson, AZ and there continues to be interest in the units we just turned around. We have 4 units available after recently completing rehab and our PM is looking to get them all filled in the next 15 days. In our San Jose, CA apartment we still have 100% occupancy. One of our tenants was going to move out in April but decided to stay given the current climate. So far at least, it seems less folks are moving but there's still a level of demand vs a complete drop-off. I just moved to Denver (Castle Rock) so I don't have insights specific to this market but 85% of my portfolio spans West, SW and central states and we're still seeing tenants paying and prospective folks looking for rentals. 

Thanks @Michelle Lutz and @Logan Freeman. We did some further due diligence on the rehab and did uncover some higher ticket items. Adjusted the LTC and ARV numbers as needed. Didn't pencil out for our model. Appreciate you weighing in here.

BP Nation,

Was hoping to get y'alls input on a project we're considering in the Kansas City, MO, particularly around After Repair Value (ARV). To provide a bit of context, we're value add, buy and hold investors with a focus on BRRRR as our primary strategy. Here's the details:

• -MF in North Kansas City - C Class Property - B Neighborhood
  
• -Purchase price $640k
• -Rehab $85k
• -Total project cost $725k
• -Pro forma gross rents $9,500mth / $114,000yr
• -Addtl Income $600mth / $7,200yr
• -Expense Multiple ~40-45%

Based on the above figures, we're projecting NOI to be anywhere from $70-75k. We've bought and sold a number of MF's in KCMO (Raytown area) in the past few years and the cap rates upon selling we're between 8-9% (1yr ago). In looking around and reading the forums, it seems cap rates are still compressing a bit around greater KCMO. For the above project, we're anticipating ARV to be between $850-$950k and frankly, the deal wouldn't really fit our investor's needs or our model if not.

Any thoughts here? Am I crazy to project an ARV in that range using a 8-9% cap range?