All Forum Posts by: Zachary Ware

I think this is a great move. Looking at these smaller properties primarily between 5-50 units will help in terms of competition. You will not typically be competing with institutional investors who can typically take smaller margins because of their scale. Another advantage is in the sellers. Many of these properties will be owned by mom-and-pop operators who are tired landlords or looking for their own exit. I think the amount of deals you will find distressed opportunities that are being sold for below market will be significantly larger than large complexes. You will also find financing for these assets to be easier with local credit unions, private lending, and DSCR all interested in lending on this size of complexes. You will still need someone with a high network and a strong track record, but borrower credit will be less stringent than a property with 200 units.

I think the largest cons will be in the management of a smaller number of units over a larger distance. The cost to manage per unit will be drastically higher than if you could spread it over many units. 

I love @Evan Polaski's note on getting into the business. I think this gets glossed over but finding a position in the industry is a great way to learn the skills and meet the network you need! 

Sounds like a great deal and I agree with others that the seller really needs a pain point for "Subject To". They need to get rid of a property or get the burden of the current mortgage offloaded as soon as possible, with many of these sellers facing foreclosure. This sounds like a deal that a private lender/friend/family would be helpful on. 

I agree that having an organized office is a huge first impression for tenants. One in particular I have noticed how the community name is presented and what kind of sign it is on. There are infinite ways to draw appeal to this but when I think of a complex I have seen in person, I always think about the sign and landscaping around where the community name is presented. 

No, an ADU does not make your house multifamily but there are still zoning restrictions on ADUs.

Hey Trevor, 

If you can provide more details you will get better answers here. What are you looking for or what are you having trouble with? Is it a matter of not having enough liquidity or running into DTI issues? There are a lot of strategies and you might want to narrow them down to play on your own strengths and weaknesses.

I agree with the other posts here that having the advantage of lower required payments with the ability to pay the loan down quicker gives you more flexibility. 

As others have already suggested, be careful with nonconforming, illegal, and even unpermitted properties. It is a virtually impossible to get rezoned and will be more of a headache than they are worth. You will have better luck with getting permits on unpermitted work but it can still be a lengthy process. 

Thanks for the great book recommendations on this thread. I have to add to the reading list. 

Hey Dave, I will be attending. Lets connect!