Hey All - been cruising here for a bit and am about ready to jump into the Dallas market in MF. I would love some feedback and 'rules of thumb' in MF in the areas. I'm an active RE agent in Los Angeles, have plenty of sales/rehab/build experience, but really only know my local market. My objective is to buy several MF units that are as cash flow as possible, long term holds, excellent management, and with leverage. For now, 1MM is the price point.
My challenges are:
1. Knowing the averages of what investors look for in the marketplace - is the benchmark strictly a Cash on Cash for return? Cap rates? GRM? If so, what is a normal percentage?
2. Locating the areas that are steady and have growth potential in rental demand over a longer time period.
3. How to structure the deal and align myself with an agent. Here in LA we have dual agency, but in TX I understand you can't be repped by an agent on both sides. What's the best way to have someone counsel you, use your license as an advantage, and get a better deal?
Any thoughts from the community are appreciated. Love what we do here. Thanks!
Hey David, in the same boat as you. From speaking with agents and other local investors just ask them the going cap rate for the area you're looking into. What cap rates were you looking for? As for the dual agency, haven't had 1 single agent mention they couldn't represent me when inquiring about making an offer on their listing. But I guess money can make people forget things like ethics or rules haha. Which markets are you reviewing deals in?
I live in Ca. and invest in Texas, able to do so with excellent property management, construction/rehab contacts and financial connections. By communicating with several brokers as well as individuals, I have a great circle of agents sending me properties to consider as well as financing leads. Initiating your network activity is everything.
Good morning @David Bruce ,
Texas law does allow for an agent to act as an intermediary between the buyer and seller, however, they must obtain written consent from both parties. While it can be done, I don't recommend it to anyone because it benefits each party more to have dedicated representation. Additionally, it makes it more difficult for the agent to comply with confidentiality and fiduciary responsibility requirements when acting as an intermediary.
I second what @Kathy Stewart said; getting a network established is critical to making sound decision for long distance investments.
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