All Forum Posts by: Trevor Richardson

It changes lending and could alter something like insurance, taxes depending on where you live. Other than that, there really is not much else that changes between 4/5 units. The term “commercial” to me really only applies to lending. Multifamily, like single family is “residential” if it’s a single unit, duplex or 300 units by definition. Your buyer or seller pool are essentially the same. If someone wants apartments and have X to spend they will have purchasing power for 4,6,10 units. The underwriting may change slightly but either way the asset is providing housing.

There are less buyers right now but it’s still an active market. The margins and returns look better under the listing price. We are encouraging offering under the list price to begin, if they don’t accept move on to the next. 

Point buydowns with these high interest rates dramatically help cash flow projections for small multifamily. Either reducing the price to buy down to a 5.75% or having the seller do it really makes the caps etc look better.

40k ft view. Yes some investors are looking at appreciation. We all know housing supply/demand issues and in certain markets it’s almost an unsolvable problem. Proforma your analysis, offer under listing, and do a point buydown. That’s how we are keeping investors moving. 

In the west we have investors coming out of California who constantly are ok with breakeven properties. It’s a great place to store equity, complete an exchange and most Cali residents don’t want more cash flow for their income taxes. So we do deals with almost no spread pretty regularly. 

There are deals, yes even where you live. For someone new, you want to learn and there is no better way than doing a property where you are. The travel time and lag it takes to find, source and manage an investment property in another state will end up erasing your margins. Like the extra work and money required could make that slightly higher priced asset near you a better deal. 

This is a national topic. Right now cities and states are changing zoning for the “missing middle” which is the popular buzz word for this topic. It’s a conflict between cities/developers and suburban homeowners who are firmly against higher density housing. The country needs higher density housing for price stabilization, but you have zoning and people in the way. 

The thing with seller financing, is the seller has to want to do seller financing. I think for sellers who are open to seller financing the # will go up. But you can’t turn every deal into seller financing just because rates are high. So to me, it’s not a complete solution. 

If you go by the book, I guess any offer "could" be binding. But in reality. A 1-2 page LOI with basic terms and a big "this offer is non-binding" is very very common. Most if not all LOIs are drafted without an attorney. Actually people use them for that very reason. It's a let's get to common ground before a serious PSA and before people start paying attorneys for legal. Chat GPT that thing!

Sounds like a some celebration drinks and pick up the tab on dinner. 

Quote from @Enrique Huerta:

This would be a valuable tool/service, but I think it would be more beneficial as a subscription. Perhaps your thought of buying reports or "credits" (5 for $100) is a good one too but I would have the following questions:

-Where is the pricing, rents, financing info, expense info coming from?

-What is the turnaround time for 1 report?

-Is this a calculator you will provide or does someone send you an address and you put it together?

-Does an excel sheet accompany the MIPA to create further analysis?

Really great questions.

The pricing, rents, info come from a couple of different sources. If the property is on market, the price and listing info would come from the listing. Rent potentials could either come from us or the user along with the rest of the assumptions.

The financing info is ran with a very generic 70% LTV 30 yr am 7% rate. I can change this or customize this to any request. Also we have developed another sheet that goes with MIPA that provides loan tables for each cash flow scenario. So we don't know your LTV and interest rate but if you know the cash flow you can calculate where the property becomes profitable. I included a snapshot of that in the MIPA I provided.

The turnaround time could be pretty quick, it depends on volume and how we end up figuring out your first question. We may have to have a few data points that are provided, for instance if the property is off market and the county assessor is sub-par, I need the basics for the MIPA. We use MIPA right now for our own brokerage, our clients love it. Why not spread the MIPA.

Delivery, we would put it together and just provide the PDF. Or a Google drive file with 5-10 MIPAs for example.

It would not include the sheet. 

note: because this business and MF UW in general is assumption based this would be as well. It may require the user to provide us some additional data, like how taxes work in a county for a reassess calculation. It will also require a signature on a user agreement. We want these to be helpful but can’t guarantee anything. If someone is unhappy tell me why and I’ll refund the order. Rents are generally easier to research. Even if the user had to provide some data we could use it for a batch of properties. Hypothetically if I have the right inputs I could return 10 MIPAs for different properties in a day or so. 

also note: if you want message me a couple properties. I’m using feedback here to determine how helpful, what and how much these would be to provide this service in the not to distant future. If you provide feedback and help out I’ll do a MIPA for a single property for you. Message me. Thanks so much!

Quote from @Havan Le:

Super cool! Just to clarify, your service will perform UW and a beautiful report? 

Yes. I’m trying to get a sense on how valuable these would be. Send an address. I can do anything from a duplex up.  

Quote from @Keith Jablonowski:

Looks great.   Can you give a ballpark cost per property for this service for a property similar to the one in your sample report?

We can produce these pretty quick. We are thinking about pricing. What do you think investors would pay for something like this? We don’t need to charge a crazy number, I just want to help investors. You think if someone gave us 5 properties, a little info on the market for accurate underwriting. And we returned 5 MIPAs in a day or so for $100. Is that crazy?

We created MIPA to really put the numbers in front of an investor real time. People spend $1000s of dollars on books and research. MIPA puts the actual answers right in front of you. 

The inputs have to be correct, we take pride in providing a realistic cash flow summary.  

I appreciate your feedback.