CLOSED on a 98-unit TODAY!

248 Replies

Originally posted by @DL Martin :
Originally posted by @Jay Hinrichs:

@Ben Leybovich   and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

Originally posted by @Jay Hinrichs :
Originally posted by @DL Martin:
Originally posted by @Jay Hinrichs:

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

The most important thing in real estate - quality. You got that, everything else falls in place. This, as you've eloquently alluded to, Jay, is definitely not a pig :)

Originally posted by @Ben Leybovich :
Originally posted by @Jay Hinrichs:
Originally posted by @DL Martin:
Originally posted by @Jay Hinrichs:

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

 The most important thing in real estate - quality. You got that, everything else falls in place. This, as you've eloquently alluded to, Jay, is definitely not a pig :)

 ya it looked nice in the pics and I think the desert offers some advantages with weather other than some heat issues.. 

still waiting for that donation from camp Ben.... don't forget us now... 

Originally posted by @DL Martin :
Originally posted by @Jay Hinrichs :

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

DL, so happy things are working out. However, that's like saying - after 2.5 years my marriage is still great; we love each other, never fight, and intend to be married forever...lol 

Talk to me in 20 years, and if you still love that boiler and those flats - God Bless, and I'll eat my words...

In the meantime - I went into my branch of Wells Fargo the other day. I bet the building couldn't be more than 5 years old. There were tiles handing from the ceiling, and security cameras hanging off of them. The teller tells me - it rained and this happened. They are coming to fix them...sometime

DL - this is Arizona flat roof which never freezes...hhaha

There is a complex I am eyeing, but it has flats. Man, I dont know if I can cross that line...

Originally posted by @Jay Hinrichs :
Originally posted by @Ben Leybovich:
Originally posted by @Jay Hinrichs:
Originally posted by @DL Martin:
Originally posted by @Jay Hinrichs:

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

 The most important thing in real estate - quality. You got that, everything else falls in place. This, as you've eloquently alluded to, Jay, is definitely not a pig :)

 ya it looked nice in the pics and I think the desert offers some advantages with weather other than some heat issues.. 

still waiting for that donation from camp Ben.... don't forget us now... 

 Jay, statistically it costs on the average about $1,000 per door per annum less to run multifamily in the South-West than Mid-West. There are many reasons for this, but that's beside the point.

Where do I send the check. It'll be a couple of weeks, but you will get my donation!

Originally posted by @Ben Leybovich :
Originally posted by @Jay Hinrichs:
Originally posted by @Ben Leybovich:
Originally posted by @Jay Hinrichs:
Originally posted by @DL Martin:
Originally posted by @Jay Hinrichs:

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

 The most important thing in real estate - quality. You got that, everything else falls in place. This, as you've eloquently alluded to, Jay, is definitely not a pig :)

 ya it looked nice in the pics and I think the desert offers some advantages with weather other than some heat issues.. 

still waiting for that donation from camp Ben.... don't forget us now... 

 Jay, statistically it costs on the average about $1,000 per door per annum less to run multifamily in the South-West than Mid-West. There are many reasons for this, but that's beside the point.

Where do I send the check. It'll be a couple of weeks, but you will get my donation!

 aheroshome.org  instructions are there and we deeply appreciate the support..  cant wait to give that first home away to the deserving first responder.. 

Originally posted by @Jay Hinrichs :
Originally posted by @Ben Leybovich:
Originally posted by @Jay Hinrichs:
Originally posted by @Ben Leybovich:
Originally posted by @Jay Hinrichs:
Originally posted by @DL Martin:
Originally posted by @Jay Hinrichs:

@Ben Leybovich  and its sure does not look like a OHIO pig either LOL  .. 

OUCH! 

@Jay Hinrichs

This hurts!!!

Three years ago, @Ben Leybovich    shouted at me, "WE (Ben and friends of Ben) DONT BUY FLAT ROOFS AND BOILERS IN OHIO!!!"  

So I promptly bought a complex with three flat roofs and three boilers... in Ohio.  : )

Fast forward to 2018 and the ugly truth is that 2.5 years into ownership, the flat roofs and boilers reign supreme over the big fat CALPERS pension that I worked 25 years to earn.   

Financially, 2.5 years > 25 years.   : (

I am thankful that @Ben Leybovich  skedaddled to The Valley of The Sun leaving plenty of the flat roofs and boilers behind here in Ohio for the rest of us, as was his obligation in accordance with Leviticus 23:22.   

Okay @Ben Leybovich .... fire away !!!!

and congrats to Ben and   @sam grooms .  I hope that this proves to be a long and fruitful friendship/partnership for you two guys and everyone who worked with you on this deal. 

DL 

 just a refernce to the most famous saying that Ben seemed to coin over the years  30k pig in Ohio.. LOL.. I suspect he bought a low end house one time and it was not fruitful..  but hey now the sun is shinning and they are on to bigger and better things..

 The most important thing in real estate - quality. You got that, everything else falls in place. This, as you've eloquently alluded to, Jay, is definitely not a pig :)

 ya it looked nice in the pics and I think the desert offers some advantages with weather other than some heat issues.. 

still waiting for that donation from camp Ben.... don't forget us now... 

 Jay, statistically it costs on the average about $1,000 per door per annum less to run multifamily in the South-West than Mid-West. There are many reasons for this, but that's beside the point.

Where do I send the check. It'll be a couple of weeks, but you will get my donation!

 aheroshome.org  instructions are there and we deeply appreciate the support..  cant wait to give that first home away to the deserving first responder.. 

I think the cause is fantastic. Give me a couple of weeks. I am looking forward to sending that check :)

Ben

Congratulations on the new deal! Curious if you had any debt service constraints going in, did you have to raise additional capital due to a lower LTV, or is a bridge different than agency on DSCR? Clearly there is upside potential with that cap rate spread, just wondering how the lender looked at it with current actuals so relatively low compared to future potential.

Also, how conservatively do you model the fixed rate agency debt interest rate upon refi out of bridge years 2-3 and cap rate at that point?

Originally posted by @Shawn Lowery :

Congratulations on the new deal! Curious if you had any debt service constraints going in, did you have to raise additional capital due to a lower LTV, or is a bridge different than agency on DSCR? Clearly there is upside potential with that cap rate spread, just wondering how the lender looked at it with current actuals so relatively low compared to future potential.

Also, how conservatively do you model the fixed rate agency debt interest rate upon refi out of bridge years 2-3 and cap rate at that point?  

Good question, Shawn, and the answer is really a series of articles. Just briefly, no - the DSCR is not the same here as in GSE. Requirements are lower because they understand that this is a re-positioning. The LTV ended up being around 75%, and they financed the renovations. They considered rents, but their appraisal reflected the re-positioned rents and included escalation annually. The appraisal proposed weighted blended rent was within $3 from our underwriting, so basically the same. And yes - the lender was less interested in what is there today, and more interested in validating after-reno numbers, which they obviously did or we wouldn't have gotten the loan...

The interest rate is a difficult questions, not only because we don't know how conservative to be on the rate itself, but we don't know what impact the rate will have on the Cap Rates. We inflated both, and we think it's conservative enough, but if not it's important to remember that the current model liquefies a good amount of the invested equity, so if we need to accommodate higher rate or Cap Rate all that means is that we'll be able to return less capital. While that's not desirable and we'd certainly take a bit of a hit on the IRR, I see it highly unlikely that we won't be able to roll the existing debt. Stress tested the crap out of it :)

Originally posted by @Ben Leybovich :

Haha @Sam Grooms - we should probably coordinate so we don't both answer the same questions :)

Guys, this last question relative to the minimum buy-in was interesting. This is neither here nor there, and might even belong more on the blog, but there is but 1 guy on BP whose opinion I value so much that he can actually change my mind, and it's @Brian Burke . Pretty unheard of, actually...

Anyhow, a long time ago I asked Brian - how big of a deal can I do? To which he replied - how much money can you raise...? Most beginning syndicators are lucky to raise $300,000... If you have no stack, you have no deal. 

Lots of you reading this post wondering what it's going to take for you to be me - the answer is a question: 

How Much Money Can You Raise?

Congratulations @Ben Leybovich & @Sam Grooms on the successful close. What you say above is pure gold!!

Looking forward to the updates and wishing you nothing but the BEST!!

Originally posted by @Vinit N. :
Originally posted by @Ben Leybovich:

Haha @Sam Grooms - we should probably coordinate so we don't both answer the same questions :)

Guys, this last question relative to the minimum buy-in was interesting. This is neither here nor there, and might even belong more on the blog, but there is but 1 guy on BP whose opinion I value so much that he can actually change my mind, and it's @Brian Burke . Pretty unheard of, actually...

Anyhow, a long time ago I asked Brian - how big of a deal can I do? To which he replied - how much money can you raise...? Most beginning syndicators are lucky to raise $300,000... If you have no stack, you have no deal. 

Lots of you reading this post wondering what it's going to take for you to be me - the answer is a question: 

How Much Money Can You Raise?

Congratulations @Ben Leybovich & @Sam Grooms on the successful close. What you say above is pure gold!!

Looking forward to the updates and wishing you nothing but the BEST!!

Vinit - thank for your help and support! We are going to knock this one out of the park!

And then a few more :) 

@Ben Leybovich and @Sam Grooms   Mazal tov guys!  This is an inspirational post for folks such as myself who haven't gotten to the syndication level yet.  I look forward to hearing further stories about how the project unfolds.   Ben, I particularly appreciate your follow-up post where you talk about learning in real-time and changing your mind/strategy about investing.   Keep up the good work!

Ben, i would like to know how to find these private placement acquisitions, such as this 98-unit multi in phoenix. You mentioned in the comments that you had this under contract before public offerings were released. How did you (more importantly, how do I) locate deals similar to this, or any private placement acquisitions specific to real estate?

Originally posted by @Abiel Ballesteros :

Nice Congratulations!! What is the partnership structure for a deal like this . 

Abiel - this was a Reg D. Basically a limited partnership.

Originally posted by @Scott Dawson :

@Sam Grooms @Ben Leybovich I'm in the Phoenix Metro area. Let me know if there are any meet up / Masterminds to attend locally. Currently sourcing Multi Fam here in PHX and Indianapolis. Congrats on the deal and  Keep rockin!

Scott - Sam and I are going to be at @Shiloh Lundahl 's meet-up in Masa in a few weeks. Connect with him :) 

Originally posted by @Ori Skloot :

@Ben Leybovich and @Sam Grooms   Mazal tov guys!  This is an inspirational post for folks such as myself who haven't gotten to the syndication level yet.  I look forward to hearing further stories about how the project unfolds.   Ben, I particularly appreciate your follow-up post where you talk about learning in real-time and changing your mind/strategy about investing.   Keep up the good work!

 Ori - Mazal! 

First let me add my congratulations to everyone (mostly everyone) elses to @Sam Grooms and @Ben Leybovich

Second I agree with what @Chris Clothier said, no reason to feed the troll, who appears to have left the site, and given the Mods on here quite a challenge, as there are a ton of "this post has been removed" markers. 

And finally I hope to be in your shoes one day, or possibly in one of your funds, but I got a long way and a lot of hard work ahead to get there. Keep it up guys. And if you're ever interested in St. Louis let me know please, I'd be honored to do anything I can to help. 

Originally posted by @Jeremy Rotert :

Ben, i would like to know how to find these private placement acquisitions, such as this 98-unit multi in phoenix. You mentioned in the comments that you had this under contract before public offerings were released. How did you (more importantly, how do I) locate deals similar to this, or any private placement acquisitions specific to real estate?

Jeremy - I think there might be a little confusion in regards to the "private placement". Private placement refers to the funding, it has nothing to do with sourcing the deal. This was offered publically, but the seller instructed the broker that if possible to get an offer from a valid buyer before the craziness of a call, to do it. Not every seller wants to get tied up in negotiations with 6 parties highest and best.

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