Multi- Family/Quadplex/Nebbie to investing/Gaining more knowledge
Fresno, CA · Member since 2020 · 11 posts · 2 votes
Hi everyone! Just signed up for Pro not too long ago and been educating myself with the website and books from bigger pockets! Before Dec. 1st I want to land my first deal on a quadplex and live in one of the units! For those of you that have been doing Multi family properties for a while I would love to here your stories, learn what went wrong in a deal you did and how you over came! I live in Fresno Ca and would love to connect with people with the same goal!
Hi @Sabrina Mouavangsou and welcome to BP! I did my first syndication buying a 16-plex from a non-profit that subsidized rental units. I thought it would be a great way to have guaranteed income as the seller would continue on as the subsidized rent payer. About 2 months into it, they started finding 'reasons' to boot people off of their program, leaving me with a bunch of worried investors, a 16-plex, and 25% occupancy! There were many sleepless nights.
I (and luck) solved the problem when a contractor looking for long-term motel rentals contacted me about a small motel I own. That was full, but I got creative and quickly furnished 5 units for this contractor. We signed a 6 month lease, but they ended up staying for 1.5 years. He paid 1.25x rent plus a premium for the furnishings and I got the place back in the black without missing any payments. What a relief.
I sold that property 8 months ago and investors walked away with an 80.2% ROI.
Hi! I am located in northern CA but have been looking into the Fresno/Clovis area for small multifamily because we want a place that is somewhat close by but with better prices than the Bay. Bought a condo in Vegas last year but ready to take that next step. Would love to connect to hear your guys' plans and thoughts about the market there.
@Sabrina Mouavangsou, thankfully no real horror stories here. In my duplex, I got it rehabbed, but didn't market it well for lease. Just a sign in the yard and one near the corner of the main road. As such, even with a good unit, for a good price, in a great neighborhood, I wasn't getting a lot of traction. I did end up finding an older, widowed woman and her grown niece to each take a unit. They both signed two year leases. The nice (about 45 at the time) had a bankruptcy from 4 or 5 years ago, that she attributed to her divorce. Well after about 8 months into the lease, she lost her job and was going to be filing bankruptcy again and moving out. She let me know ahead of time, and she left the place in good condition, but definitely made me think twice about bankruptcies, even with a seemingly valid excuse and solid income job.
Her aunt was a whole other issue. Generally, she was fine, but I don't believe she had ever rented until my unit. As such, she put in requests (and threatened to report me to the Council of Aged People and the BBB) because I wouldn't add an overhead light in the middle of her living room, or more outlets in the hallway. Additionally, when she moved out, she did hire a contractor to come in and do some repairs. She did not repair all the holes in the walls that she put in the walls from her pictures. I withheld the cost to repair and supplied all documentation, but got some nasty voicemails about how I am stealing from the elderly, and this is how I make money, etc.
The lesson here: I really prefer not to rent to people who haven't rented in the past. And if I am not seeing a rental history on the application, I am more direct in what types of things they can/should call me about and what is their responsibility. I also make it very clear, that the expectation is that I get the property back in the same condition I lease it in. If there are no holes in walls, I expect no holes when they move out.
Hi Benjamin! Wow there must have been a lot of regulations changed in the program for that many people to leave. So had no say in what stays or goes in the program? Like a section 8 housing?
When you talked about furnishing another property did you do it on your own? How did you get into that? Could you elaborate on that more?
The ROI sounds great! what did you end up walking away with?
Hi Benjamin Wow there must have been a lot of regulations changed in the program for that many people to leave. So had no say in what stays or goes in the program? Like a section 8 housing?
When you talked about furnishing another property did you do it on your own? How did you get into that? Could you elaborate on that more?
The ROI sounds great! what did you end up walking away with? @Benjamin Aaker
Hi! I am located in northern CA but have been looking into the Fresno/Clovis area for small multifamily because we want a place that is somewhat close by but with better prices than the Bay. Bought a condo in Vegas last year but ready to take that next step. Would love to connect to hear your guys' plans and thoughts about the market there.
Hi Samuel! That sounds great! My partner and I are in the process of learning and gaining more knowledge but once we are ready we will let you know! But yes we would love to connect with and get together soon this year!
@Sabrina Mouavangsou, thankfully no real horror stories here. In my duplex, I got it rehabbed, but didn't market it well for lease. Just a sign in the yard and one near the corner of the main road. As such, even with a good unit, for a good price, in a great neighborhood, I wasn't getting a lot of traction. I did end up finding an older, widowed woman and her grown niece to each take a unit. They both signed two year leases. The nice (about 45 at the time) had a bankruptcy from 4 or 5 years ago, that she attributed to her divorce. Well after about 8 months into the lease, she lost her job and was going to be filing bankruptcy again and moving out. She let me know ahead of time, and she left the place in good condition, but definitely made me think twice about bankruptcies, even with a seemingly valid excuse and solid income job.
Her aunt was a whole other issue. Generally, she was fine, but I don't believe she had ever rented until my unit. As such, she put in requests (and threatened to report me to the Council of Aged People and the BBB) because I wouldn't add an overhead light in the middle of her living room, or more outlets in the hallway. Additionally, when she moved out, she did hire a contractor to come in and do some repairs. She did not repair all the holes in the walls that she put in the walls from her pictures. I withheld the cost to repair and supplied all documentation, but got some nasty voicemails about how I am stealing from the elderly, and this is how I make money, etc.
The lesson here: I really prefer not to rent to people who haven't rented in the past. And if I am not seeing a rental history on the application, I am more direct in what types of things they can/should call me about and what is their responsibility. I also make it very clear, that the expectation is that I get the property back in the same condition I lease it in. If there are no holes in walls, I expect no holes when they move out.
Thank you Evan for sharing that! Did you ever think about having a property manager or were you new to where you wanted to save on cost?
That is probably one of my main concerns because you never really know the tenants personally. I have not gone into learning about how to manage tenants yet.
Over the years what has helped you to manage tenants better or the requirements you have when a tenant wants to move in?
@Sabrina Mouavangsou, I didn't clearly state: the contractor needed to have furnishings, so I bought them up front and he paid a monthly fee to reimburse me for them. I got to keep them at the end as part of the deal. I ended up with a couple percentage points higher. I sold the property at year 2 rather than the planned year 5. I paid all 5 years of preferred returns and the rest was split 60% investors 40% principal. A great deal for everyone.