All Forum Posts by: Tyler Fontaine

 He is correct. The market out here is strong still. Providence RI is also adding a commuter rail to Boston. So that and surrounding areas will do well for rentals. Robust schools (Brown, RIC, RISD, Johnson and Whales), development opportunities coming, etc,

 YES! Qualifying questions is great. You shouldn't be overly concerned about the price. You should be more concerned with the value that is provided by the company you work with. Getting a PM is a business partnership. Good PM's work WITH you, not for you.

So some good qualifying questions...

What criteria do you use when placing tenants?

What's your average turn around time for vacancies?

What systems do you have in place for maintenance issues? Do you have an in-house maintenance team or is it all third-party vendors? Do you make sure they are licensed, insured, provide W9's? How are emergency issues vs. regular maintenance handled?

What systems do you have for management? i.e. Collecting rents, dispersing funds, paying vendors, etc?

@Josiah Kellerman Good for you! Sounds like you're getting a good foundation laid so you can make big moves later or have some solid cashflow to help your lifestyle. 

One last thing, since you're going into a partnership. Have your attorney draft an operating agreement that everyone is on. It should outline everyones specific roles and set expectations up front. 

I'd also consider on how executive decisions get made... will it be majority vote out of 3? Can one individual be granted the final say on all issues (maybe they have more experience, dedicate more time, etc) 

When it comes to these situations you need effective decision making with SPEED. That is what will save you tine and in turn money. A system to make decisions is crucial so that no one feels slighted or screwed over. 

However this happens, it should be outlined from the beginning if possible.

What's making you want to self-manage? Is it the money alone?

If you know your target rents in the end you can run comps against sales of similar properties as well as against current rentals who have the target rent you're shooting for. 

You can then assess the properties that are similar to what your goals are. This should give you an idea of how much rehab/the quality of rehab you have to do to get where you need to be.

Once thats established you can run your numbers knowing what threshold you have to get the property to for you to attain the numbers you want.

Im assuming you are investing remotely with these locations? 

So some of our clients invest remotely with us. We have established relationships with them and they trust us when we bring a deal to them or when we advise them on the next course of action with their current investments.

Couple things I would say to you on this strategy. 

1. Have explicit metrics to go off of. Clearly define what the minimum and maximums are for your downpayment, purchase price, cashflow, NOI, CapRate, asset class, total number of units per building, etc

This will give you clarity as you scrub deals. Stick to your criteria and don't make emotional decisions.

2. I HIGHLY recommend you get boots on the ground that you trust. I would be going to the city and meeting with the PM you're considering. They should be well versed on how they manage the asset, deal with tenant turnovers, and have a robust plan for maintenance. They should have good reviews and good recommendations. 

3. Join the local REIAs in the areas that you are considering investing.  Ask the locals their favorite geographic locations to invest, who the players in the area are, recommendations for PM's/Contractors/Realtors/Lenders/etc

What is drawing you to these markets? Why not do it in your own backyard?

Congrats on the hard work and getting to where you want to develop for yourselves. 

Check your local REIA and ask who is already building projects and then build that relationship; ask the group who funds ground up builds - find out what they require to access funding; connect with local Realtors who work with developers - they may already have the network for access to capital, land acquisitions, and so on.

I would recommend finding a local who has already syndicated before. Ask them what you have to do or offer to pay them to review deals with you or try to walk you through how to do this process.

Perhaps your go to RE attny can give you a break down over this as well as to how to get the proper info together so that you can move forward.

 So then what do you think is an appropriate course of action for this? How much should one pay for the estimate and walkthrough?