Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
Pretty excited to have our system working to the point where are closing 4 deals in a month with a pipeline looking like 4 more closes next month. These are single family rentals.
We also closed on a 12 unit earlier this year and have a few apartment buildings in various stages of the hopper, but they take a bit longer so its hard to predict when they all will reach their next stages.
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
@Desteni Barnes - hard work, persistence, marketing, relationship development, pipeline forecasting. work while your competitors are watching Marco Polo series binge on Netflix (i just watched that actually lol but just late at night after my fam was in bed and I had put in a 10 hourer ;) )
@Luke G. - same as above but a variety of ways. feeders from brokers, postcards etc no magic pill i hate to say, wish there was
@Michael Noto - in Syracuse NY. But now that my POC (proof of concept is working and have picked up 15 this year, I am looking for other cities as well that fit the same model. They are out there. Rochester, NY and some others as well) But I caution, It VERY EASY to make mistakes in this model. There really is no room for error. I have been in this game for 8 years and know what I am doing. I am also not saying this to keep competition away. I have to say I am buying properties from investors who made mistakes and lost their shirts and I come in and know what to do. Be careful don't rush into this model. I am a multifamily guy applying a multifamily approach to a single family model. It a very different way to think about things. At its essence its simple but simple is usually lots of hard work and experience masked as simple.
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
@Account Closed thanks so much. Lots of hard work patience and persistence goes into creating, executing and maintaining systems that allow you scale your business
Wholesaler · Saint Augustine, FL · Member since 2016 · 328 posts · 98 votes
10y
Chris Jackson that's amazing! Stay fired up! Good for you for opening up your focus to not just SFR but also MFR. I work solely with MFR so if you ever need anything feel free to PM me. Good luck!
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
@Hardeep Bindra - thanks! Don't give up. I was a newbie too once. I was 'thinking' about being a real estate investor for about 7 years before I decided I had enough of the start and stop and going nowhere. Patience and persistence.
@Noam Adler - thanks Noam. PS if I had to pick a market right now that I wish I could duplicate our team and allocate time to it would be Cleveland. Get on it!
@Danielle Fattizzi - thanks! Actually its the opposite. We are MF investors first but opening up to SFRs with an MF mindset. We prefer MF but right now MF is super heated and our marketing is out there but we are very selective. Need to be extremely conservative right now in MF space if you are long gamer like we are. SFRs offer us cash flow yield and equity cushion we are looking for right now. But we have not taken our eye off the Multifam ball dont get me wrong. we are still players in that space ;)
@Sam Steadman - thanks! one needs to celebrate victories too. All too often in real estate because closings are 'slow' you get the closing and its 'phew' and anticlimatic. Thats the incorrect move. Celebrate victories.
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
@Joe Fairless - good question, lessons learned are: - stay focused and commit to the plan. We decided to try out this SFR model as a POC ( proof of concept) and at first seemed like may not be the best fit given the work required and not as many properties that fit our criteria were showing up in the pipeline. We stayed committed and kept pushing - reconfirmed the value of SOPs (standard operating procedures) - we created checklists and subchecklists in order to allows us to not think about the process and forget an item that causes a roadblock in the process. We are constantly adding and revising the checklist
@Percy N. - also a good question - yes need to work backwards on how to minimize the issues with SFRs where you don't get the advantages of economies of scale. 1) 1 roof, 1 boiler. We mitigated this risk with only choosing properties with decent roofs, young boilers. If we start to take on SFRs with roof with end of life in next 1-3 years we start to creep into the problem that occur from no economies of scale like you get in larger apartment complexes 2) systems - need to have checklists at a very detailed level or it would be very easy to say 'forget this' this is too much work
I am not going to try to say that 50 SFRs is able to achieve economies of scale with the right systems and process as compared to taking down a 50 unit building. That's why we prefer apartment buildings. However the yield we are getting with our SFRs coupled with our systems is proving to be viable model for us as an addition to our company strategy moving forward.
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
10y
@Chris Jackson, was the liquidity in the SFR market compared to the apartment complex market a factor in your decision to focus on SFRs?
Do you secure commercial non-recourse financing for the SFR purchases? At what point do you invest in dedicated maintenance, sales/rental office, property Mgt, etc?
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
@Percy N. - we added SFRs only to add to our overall strategy to achieve solid returns for our investors. We are finding even with our MF marketing that we are coming across fewer opportunities in MF that meet our criteria. So we can either wait out the market cycle, do less deals per year or bob and weave and be flexible and add to our strategy. Liquidity was not the factor. Opportunity for yield was our factor.
No we do not secure non recourse as we are buying 1 or 2 at a time most. We have private investors for each property securitized by each property which has enough equity in each to make the note holder feel healthy. We refi at a lower rate once the property shows the banks we have relationships with that the property has seasoned with renter for enough time. The private investor is made whole with payment of their principal returned along with their agreed upon remaining interest and if the private investor wishes to continue we put them into another property.
We have a PM on all of them already. We would never do a deal without a PM. I'm obsessed with scalability so managing each property make us too linear and that makes me cringe.
We would consider putting a commercial loan on the pool in the future if it was financially advantageous for us to do so in the future. For now, offering our investors a different option, in this case a debt option is resonating with them favorably. Plus to get into a non-recourse loan to purchase would mean we would have to purchase probably over 25+ at a time and based on what I am seeing in the SFR pools out there, the pools are gross. I wouldn't touch them. If we ever pooled up our SFR portfolio the next investor would put a premium on the portfolio because of the overall quality of all the SFRs. This is why we are hand picking each we decide to purchase. That takes time but worth it in the long-run
Investor · Southold, NY · Member since 2016 · 173 posts · 154 votes
10y
Getting close to 8 in 8. 1 Closed 3 weeks ago, closing next week and one the week after. Need 1 after to close for 8 in 8. 7 in 8 just doesn't have the same ring to it. :)