Best state to invest Multi family / Apartments

[Shital Thakkar]

Hi, I am looking for small size apartments and I can see Texas is very hot market. Which one other good city/state for MultiFamily/ Apartments investment.

[Chris Tracy]

@Shital Thakkar... I'm curious... Why are you looking for small apartments?  

Why not larger ones (eg. >50 units)?

[Shital Thakkar]

HI @Chris Tracy,

Here are some points 

[1] Less Equity required. 

[2] Like to get some experience before going for Big. SandBox.

[3] Less competition with Syndication or Institutional investors.

I think from management point, 50-60 unit is better as you can higher full time manager... but again thinking about 3 points and that forcing me to go for small.

What is your suggestion?

[Chris Tracy]

@Shital Thakkar- Regarding:

#1. You don't have to worry about equity because you want to use other people's $- not yours.  Basically private lenders... So the sky is the limit.

#2.  You don't need experience before going big.  You just need a partner who has it- typically referred to as a sponsor.

#3.  I agree with you here, as I have been outbid many times by Hedge funds, etc on deals that were like 200-300 units.  

However, you can acquire a 50-100 unit deal that can fly under the radar and is "too small" for institutional investors, but would be perfect for us!  

You're absolutely right about the management issue too!

Feel free to reach out if you need any help!

[Shanel Wiggins]

I was watching a YouTube video and this real estate investor named Juan Pablo spoke on how to determine the best markets for rentals and he stated that an investor can find a deal in any market, just as long as the numbers work. 

[Christopher Lombardi]

@Shanel Wiggins - this is very true Shanel.  You can find deals in any market.  I focus only on Class A markets though because there are some markets, no matter how good the deal seems, its not worth getting involved.  

[Shanel Wiggins]

@Christopher Lombardi

Yes, I think you should use discretion when deciding what class market you're willing to invest in. 

But, in class A markets isn't cash flow low and appreciation high?

[Christopher Lombardi]

Generally, yes.   But I find you still get a great cash on cash return in the Class A neighborhoods if you can find a great deal.  My typical deal....  i purchased a small home for $146,000 but the home is worth a lot more, I just found a great deal.  The house was rented for $2200 per month after we put 20k into it.  We immediately went to the bank to refinance and they valued it at $335,000 and gave us a loan for $234,000.   So, our rent to value ratio isnt great, but with the financing, we had no money out of pocket and basically have an infinite cash on cash return.   

That type of deal is available anywhere you go.  You have to do a little more digging in the better neighborhoods, but it pays off in the end.  

[Izhak Kofman]

 I am seeking a mentor with experience in raising private money for purchasing multi-family units, in exchange will help with remodeling, repairs and more...

[Jeff Kehl]

@Shital Thakkar I personally like to buy close to where I live. But when I look at a new market I look at statistics like job growth, population growth, favorable(to landlords) political climate. 

If you're in Texas, you're in a great location already. 

Just move out from Dallas a bit. We're a small town about an hour from Atlanta and it's still a great place to find properties even though the Atlanta market is very hot now.

Travel out the interstates from Dallas and look at the smaller towns. Pay particular attention to college towns and/or towns experiencing a lot of population growth. Visit their chamber of commerce website and look for towns announcing new employers coming to town. Look for places where new construction has been slow but has picked up recently or may be about to.

[Doug Johnson]

Originally posted by @Izhak Kofman:

 I am seeking a mentor with experience in raising private money for purchasing multi-family units, in exchange will help with remodeling, repairs and more...

I work Brad Sumrok as a mentor. He has been very helpful to me and his group of students really work together to help each other to be successful. A great group of people. PM me if you would like to discuss my experience with Brad.

[Izhak Kofman]

Doug Hi, thanks for reply. Yes I would to hear from you about your mentor and your group.

Regards,

Izhak