Agent/Broker or wholesaler needed

Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes

Hi All,

I'm looking to buy my first multi-residential/commercial property but so far it's been very challenging and time-consuming to find a great opportunity. I'm wondering if there are any CCIM designated broker, real estate agents or wholesalers here who are willing to assist me. My preferred locations are Florida, Chicago or Texas. Minimum 20 units; minimum cap rate 10%. Thanks in advance.

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Benjamin Pekarek

Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes

10y

@Account Closed,

Rather than reading my detailed post above to answer your question, you've simply continued your attack on my credibility...not too sure what I did to you to cause you to make an *** of yourself...but that's not my problem. To AGAIN answer your question. Depending on the specific market (Tampa, central FL, Sarasota, etc.), and the class of property (A-D), there is a market CAP rate, and therefore anticipated NOI. This is Real Estate 101! If you're buying a class D property at 5% and expecting appreciation like a class A, you will be in for one hell of a shock when you go to sell! THAT is the overpaying "worst" investor you're speaking of above. To again attempt to educate you on my markets :

For central Fl, Class C & D properties/MHPs, the current CAP rate is 11%-13%.

For Tampa, Class C & D properties, the current CAP rate is 9%-10%.

For Sarasota B properties, the current CAP rate is 4%-5%. For C & D, 7%-9%.

For Leon county (Tallahassee), B class apartment complexes are trading for 8%-9% due to the demand for student housing.

Again, assuming you know what you're talking about (3.3K posts, you shouldn't always be such a hard headed individual), you should be aware that you can beat the market, or lose depending on the current demand (CAP rates shifting due to increased/decreased demand), or a distressed seller/buyer purchasing on emotion.

The above rates are pulled directly from the various Realtor sold metrics, specifically GTAR (Greater Tampa Association of Realtors), RASM (Realtor Association of Sarasota and Manatee), and EPCAR (East Polk County Association of Realtors).

Does THIS post now answer your question?

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Account Closed
Boynton Beach, FL · Member since 2016 · 125 posts · 29 votes
10y
@Oyane Jacques -- I'd love to try and help. I will send you a PM.
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Thanks Laura
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Kevin Greer
Loan Officer / Investor · Chicago, IL · Member since 2015 · 23 posts · 3 votes
10y
What areas of Chicago are acceptable? Or it doesn't master of the cap rate is 10% or higher?
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Kevin Greer
Loan Officer / Investor · Chicago, IL · Member since 2015 · 23 posts · 3 votes
10y
if
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Oyane Jacques:

Hi All,
Minimum 20 units; minimum cap rate 10%. Thanks in advance.
Why are you choosing markets with less demand for your first multifamily?
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
Broker here - What price point are you looking at? 10% CAP is easily doable depending on the class in greater Tampa. However, if you're also anticipating prime class (A-B), I'd suggest the deep south -Alabama, Tennessee, Georgia, etc., or the midwest cities - Indianapolis, Chicagoland, Kansas City, St. Louis, etc.
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Originally posted by @Kevin Greer:

What areas of Chicago are acceptable? Or it doesn't master of the cap rate is 10% or higher?
It doesn't really matter as long as it's in a good area, at least 90% occupied and at the minimum cap rate of 10%
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Originally posted by @Account Closed:

Originally posted by @Oyane Jacques:
Hi All,
Minimum 20 units; minimum cap rate 10%. Thanks in advance.
Why are you choosing markets with less demand for your first multifamily?
Bob, I chose areas that I'm at least a bit familiar with. What areas do you suggest? I'm pretty open to suggestions. Thanks much.
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
It was your fixation on 10%+ cap rates that had me questioning you. How familiar can you be with "Florida", "Texas" or even Chicago? I'm sure you can find cap rate markets from <5-15%+ in any of those areas and even in your town.
Since a cap rate is not a profit metric but more of a demand metric I was curious why you were focusing on lower demand markets. Why not a low cap rate, high profit market?
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Originally posted by @Benjamin Pekarek:

Broker here - What price point are you looking at? 10% CAP is easily doable depending on the class in greater Tampa. However, if you're also anticipating prime class (A-B), I'd suggest the deep south -Alabama, Tennessee, Georgia, etc., or the midwest cities - Indianapolis, Chicagoland, Kansas City, St. Louis, etc.
Benjamin, that's great info. I wasn't sure where exactly are the best areas for multi-units so I've stuck to more familiar areas; however, my search has proved to be very challenging in the Florida area. Inventory seems low as well. I'm not looking to go over 1.5M but with an attractive NOI I can be flexible.
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Oyane Jacques:

Originally posted by @Benjamin Pekarek:
with an attractive NOI I can be flexible.
How would you define an attractive NOI? NOI is NOI ! In a 10% cap rate market your $1,500,000 would get you a chance at $150,000 NOI. In a 5% market it would get you $75,000. It would seem the $75,000 is more "attractive" yet you are limiting yourself to less "attractive" markets.
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
@Oyane Jacques,
Depending on your specific requirements, there are multiple avenues here in Florida open to you. I DM'ed you, but for the public forum I'd recommend some of the Florida college towns (Tallahassee, Gainesville, Jacksonville), the "heartland" - Polk, Highlands, DeSoto, and Hardee counties, & greater Tampa.
Your 10% CAP can be met, or exceeded in MHPs, and small C-D multifamily complexes, but again, if you're looking for prime (A-B) class properties, you'll be looking for awhile - they're A.) In high demand right now, and B.) Few and far between. When they do hit the market, if they're priced in the 10% or better market, they're snapped up in a matter of HOURS, not days!
-Ben
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Benjamin Pekarek:

@Oyane Jacques,
, if they're priced in the 10% or better market, they're snapped up in a matter of HOURS, not days!
-Ben
What would be better than a 10% market?
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
Originally posted by @Account Closed:

Originally posted by @Benjamin Pekarek:
@Oyane Jacques,
, if they're priced in the 10% or better market, they're snapped up in a matter of HOURS, not days!
-Ben
What would be better than a 10% market?
Bob,
Depending on the location, small (20-50 space) MHPs are trading in the 13-15% CAP range, as well, small CBS construction multifamily (10-30 units) is trading in the 8-12% CAP range depending on class grade.
I don't manage, nor facilitate purchases in LIHTC, Section 8, or Section 42 housing, but those types of properties are trading in the 13-20% CAP range at this time.
-Ben
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Benjamin Pekarek:

Originally posted by @Account Closed:
Originally posted by @Benjamin Pekarek:

@Oyane Jacques,
, if they're priced in the 10% or better market, they're snapped up in a matter of HOURS, not days!
-Ben
What would be better than a 10% market?
Bob,
Depending on the location, small (20-50 space) MHPs are trading in the 13-15% CAP range, as well, small CBS construction multifamily (10-30 units) is trading in the 8-12% CAP range depending on class grade.
I don't manage, nor facilitate purchases in LIHTC, Section 8, or Section 42 housing, but those types of properties are trading in the 13-20% CAP range at this time.
-Ben
OK, how does that answer my question? Are you saying a property trading at a 20% cap rate is better than a property trading at a 10% cap rate?
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Originally posted by @Benjamin Pekarek:

@Oyane Jacques,
Depending on your specific requirements, there are multiple avenues here in Florida open to you. I DM'ed you, but for the public forum I'd recommend some of the Florida college towns (Tallahassee, Gainesville, Jacksonville), the "heartland" - Polk, Highlands, DeSoto, and Hardee counties, & greater Tampa.
Your 10% CAP can be met, or exceeded in MHPs, and small C-D multifamily complexes, but again, if you're looking for prime (A-B) class properties, you'll be looking for awhile - they're A.) In high demand right now, and B.) Few and far between. When they do hit the market, if they're priced in the 10% or better market, they're snapped up in a matter of HOURS, not days!
-Ben
Thanks, Ben. I've responded to your private message. My email is attached.
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
@Account Closed,
If you're evaluating a property solely based on CAP, you're doing yourself a disservice. You should know that as well as I do based off of your number of posts.
For me personally, a property needs to generate a gross income of 25-30% of purchase price, less 10% management paid to my company just like anyone else, CapEx of 5%, & maintenance reserves of 5%, for an NOI of 5-10%. Assuming the listing agent did their job, that puts me roughly at a 5-10% CAP.
I'm not saying that a 20% CAP property is any better than a 10% CAP property - it will 100% depend on the individual purchasing the property and their risk assessment. For me personally, as I'm the manager, I have no problem purchasing management intensive properties, and attaining the higher ROI. For a truly passive investor an A class asset trading at 5% might be more desirable for the liquidity factor (A's sell better than C's and D's), along with the quality of tenant.
Personally, I'd rather deal with the meth heads and hookers and make 10-20%, then the CPAs and JDs renting lofts and making 4-6%. That being said, as a manager I gravitate towards the middle of the road, and the higher end - if I'm going to make a flat 10% whether I'm dealing with the scum of the earth, or the cream of the crop, I'd rather deal with the easygoing CPA paying $2,000($200) at that point, than having a knife pulled on me when I show up for your $500($50) cash payment.
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Oyane Jacques
OP
Healthcare/real estate · Toronto, ON · Member since 2015 · 9 posts · 7 votes
10y
Originally posted by @Account Closed:

It was your fixation on 10%+ cap rates that had me questioning you. How familiar can you be with "Florida", "Texas" or even Chicago? I'm sure you can find cap rate markets from <5-15%+ in any of those areas and even in your town.
Since a cap rate is not a profit metric but more of a demand metric I was curious why you were focusing on lower demand markets. Why not a low cap rate, high profit market?
Bob, I would assume that cap rate is dependent on the market - it's not carved in stone across the board. I've been searching for properties in my preferred markets and based on what I've been finding, a 10% cap rate is what works best for me - especially in the Florida market. Of course, a lower cap rate may be better in certain instances depending on what the investor is looking for. But you're right, a lower cap rate might be best but I think it depends on what the market is capping at.
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Benjamin Pekarek:

@Account Closed,
For me personally, a property needs to generate a gross income of 25-30% of purchase price, less 10% management paid to my company just like anyone else, CapEx of 5%, & maintenance reserves of 5%, for an NOI of 5-10%. Assuming the listing agent did their job, that puts me roughly at a 5-10% CAP.
So you are looking at a $100,000 property having rents of $2,500 a month? Pretty far fetched. Can you show me a sold property that sold for a 3.3 GRM!? There MUST be a reason the market will pay so LITTLE for those rents. Also you need to use ALL operating expenses to get a NOI. You are missing several so all you have is a crap rate.
5-10% cap rate range?!?! Your range of value for a $10,000 NOI would be $50,000 to $100,000. That just sounds like you don't know what you are talking about.
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
Bob,
Been doing this for 10 years, manage 200 units, and live off of my personal rental cash flow. Think I know a thing or two about REI.
Most recent personal acquisition was in Polk County, FL : February 2016.
Small six unit complex for $135,000. 100% occupied, 17% delinquency rate.
Gross rents of $4,000/mo. (5 @ $650, 1 @ $750), all units separately metered for utilities.
$48,000.00 gross income.
Taxes of $1,800/yr.
Insurance at $1,200/yr.
Landscaping $2,400/yr.
Management $4,800/yr.
10% reserves (5% CapEx, and 5% maintenance) $4,800/yr.
$15,000 estimated expenses
Assuming continued 17% delinquency (1 unit out of 6 every month), and Vacancy/Loss of 1 mo./6 units/yr. (8.5%) $4,000/yr.
Total estimated costs of $19,000 yr. for an NOI of $29,000.00, or 21.4%
This is a C- property with meth heads and SSI tenants. I'm constantly fielding phone calls from either the tenants, or the PD for the jurisdiction (primarily domestic violence).
TINY acquisition in July last year in Sarasota County FL :
Vacant REO Duplex needing full rehab for $139,000
2/2 each side, $40,000 renovation each side ($80,000 total) for total investment of $219,000 out the door.
Both sides rented for $1,500/mo,, separately metered for utilities, no delinquency, no vacancy.
$36,000.00 gross income.
Taxes of $2,049.99/yr.
Insurance at $3,600.00/yr. (flood zone)
Landscaping $600.00/yr.
Management $3,600.00/yr.
10% Reserves (5% CapEx & 5% Maintenance) $3,600.00/yr.
$13,450.00 estimated expenses
Assuming no delinquency (different market, different tenants), and Vacancy/Loss of 1/mo./2 units/yr. (8.5%) $3,600.00/yr.
Total cost of $17,050/yr. NOI of $18,950.00, or 8.6%
This is a B class asset (one tenant is a bank teller, other is an LPN (nurse)). I never deal with them - they pay their rent electronically. Since we just replaced EVERYTHING, there's almost never any issues with the maintenance, and we're just building up the reserves.
The biggest difference is the appreciation - Polk Ave (Polk County) just had an appraisal at $350,000 (8% CAP rate), while Marcia St. (Sarasota County) had an appraisal at $425,000 (4.5% CAP rate).
I wouldn't expect to purchase Marcia for 20%, nor would I look in Sarasota FOR a 20% CAP property (though if I found it, I would snap it up in a heartbeat!). Nor would I be happy with an 8%-9% ROI dealing with the quality of tenants I have at Polk Ave.
Every property is different, as is their CAP.
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Benjamin Pekarek:

Bob,
Been doing this for 10 years, manage 200 units, and live off of my personal rental cash flow. Think I know a thing or two about REI.
Every property is different, as is their CAP.
No, every market has a cap rate range from closed sales. You could well be the worst investor in your market paying well above market price because you do not know how to calculate NOI or understand cap rates.
Well I've been doing this about 4 times longer than you if that is your measure. You threw a bunch of numbers out instead of replying to my specific questions. Can you answer them?
Let's just take the most recent two.
1. 3.3 GRM Fiction?
2. $50,000 value range on a $10,000 NOI?
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
@Account Closed,
Rather than reading my detailed post above to answer your question, you've simply continued your attack on my credibility...not too sure what I did to you to cause you to make an *** of yourself...but that's not my problem. To AGAIN answer your question. Depending on the specific market (Tampa, central FL, Sarasota, etc.), and the class of property (A-D), there is a market CAP rate, and therefore anticipated NOI. This is Real Estate 101! If you're buying a class D property at 5% and expecting appreciation like a class A, you will be in for one hell of a shock when you go to sell! THAT is the overpaying "worst" investor you're speaking of above. To again attempt to educate you on my markets :
For central Fl, Class C & D properties/MHPs, the current CAP rate is 11%-13%.
For Tampa, Class C & D properties, the current CAP rate is 9%-10%.
For Sarasota B properties, the current CAP rate is 4%-5%. For C & D, 7%-9%.
For Leon county (Tallahassee), B class apartment complexes are trading for 8%-9% due to the demand for student housing.
Again, assuming you know what you're talking about (3.3K posts, you shouldn't always be such a hard headed individual), you should be aware that you can beat the market, or lose depending on the current demand (CAP rates shifting due to increased/decreased demand), or a distressed seller/buyer purchasing on emotion.
The above rates are pulled directly from the various Realtor sold metrics, specifically GTAR (Greater Tampa Association of Realtors), RASM (Realtor Association of Sarasota and Manatee), and EPCAR (East Polk County Association of Realtors).
Does THIS post now answer your question?
1 Reply
Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
Originally posted by @Benjamin Pekarek:

@Account Closed,
For central Fl, Class C & D properties/MHPs, the current CAP rate is 11%-13%.
For Tampa, Class C & D properties, the current CAP rate is 9%-10%.
For Sarasota B properties, the current CAP rate is 4%-5%. For C & D, 7%-9%.
For Leon county (Tallahassee), B class apartment complexes are trading for 8%-9% due to the demand for student housing.
Does THIS post now answer your question?
NOPE! Please provide verifiable cap rate comps that support your above claims.
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Account Closed
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
10y
You stated there was a "better than 10% market".
You stated that you bought at a 3.3 GRM.
You stated the cap rate range for your market was between 5-10%.
You still are not addressing my questions about those statements.
Sorry you think I am being hard headed.
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Benjamin Pekarek
Rental Property Investor · Asheville, NC · Member since 2015 · 307 posts · 127 votes
10y
@Account Closed,
Current listings in various markets:
The below is a link to a MHP currently listed at a 10.8% CAP.
Lutz MHP
Next is a link to a frame multifamily in Lake Wales, FL that sold in 2012, was listed at an 8% CAP earlier this year, and failed to sell.
Seven Chimneys Portfolio
Here is a currently listed MHP, again in Lake Wales, currently 338 DOM on the market due to lack of demand - 20.5% stated CAP.
Lake Buffum MHP
Class D, AGAIN Lake Wales listed at a 17% CAP - 202 DOM, under contract 5 times.
Bullard - 11 units
Sold waterfront, Sarasota, 5% CAP 0 DOM.
Avenida Venecchia
38 units, St. Pete 6.5% CAP
Ave S
12 units, 6.69% CAP
Gulf Winds
7 units ghetto, Lake Wales, 18% CAP 668 DOM
N 1st St.
This again ties back to what I've been saying. Depending on the SPECIFIC market, there are different CAP rates. I'm one more time reiterating that we have multiple markets, and submarkets here in Florida.
Remind me why I wasted 30 minutes pulling specific examples to prove my point just for you?
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