All Forum Posts by: Anthony Palmiotto

James, feel free to reach out to me. My company is the dominant multifamily investment brokerage in the northern NJ market. We currently have a number of deals that fit what you are looking for.

Anthony

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Robert, I currently have a few multifamily deals in South Jersey...feel free to reach out to me to discuss. Good luck!

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In NJ I use a rough and dirty rule of thumb of $300/unit.

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@Joel Owens I can definitely say that Jersey City is a mixed bag. There are areas near the water across from Manhattan where we see sub 5 caps...then there are also war zones just blocks away where you couldn't pay me to take a building. Hard to say without an address I guess.

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As a broker, what I've typically seen in a property that cannot support a full time staff (such as this) is the use of a super. In lieu of rent you can hire the super to perform any basic maintenance, do apartment turns, possibly even show units and clean common areas. You can work out whatever part-time or full-time arrangement you want. Obviously if he is full time he would probably get a free unit and some extra income as well. That would just leave you to do the bookkeeping.

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I've always found that identifying and A or D property is fairly easy...you know it when you're looking at it. The trickier part comes when determining B-C properties which can be done with the good advice further up this thread.

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Originally posted by George Paiva:

There is so much variation right now with real estate especially with residential multifamily. I know the lindahl group says 5-7 years is a typical cycle. I also see in many areas that the recovery has already started, ie Florida, Texas. I think you should focus on a few smaller metro areas away from the "Hedge Fund" groups and evaluate the population and employment trends. At least that is what I have been doing.

In my experience, I remember the Lindahl camp saying that it is 8-12 years for a full market cycle.

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Originally posted by Eric Michaels:

I invest in these MF projects locally with a couple developers. Standard is 8% preferred return plus 70% of remaining profits. No money mgmt management fees.

Developer still does very well for himself with 30%. There are some other ways he makes money through realtor commissions, prop mgmt fees, etc.

Eric, so you're saying that assume we had a 16% cash on cash...you're getting a preferred return of 8%, and then 70% of the remaining 8% (5.6%). That would mean you're getting 13.6% of the total 16% return? That seems like I deal I wouldn't be happy with as a developer. Did I miss something?

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Originally posted by Anthony P.:

I would suggest that you analyze this property based on a "typical year" such that you include expenses such as taxes (even though you're not paying them year one). I would also not include "other charges" unless they are regular recurring charges such as laundry etc. I wouldn't be counting on charging and receiving a set amount of late fees. I would estimate repairs/maintenance/reserves at $500/unit, not $250. Finally, 3% is too low in most markets around the country so I would double check that.

And by 3% I mean 3% vacancy.

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Originally posted by Ben Leybovich:

@Aaron Mazzrillo

The financials are important but:

A - numbers are cheap and light; you can buy more and move em around to get the propforma to look good.

B - in terms of management the numbers may or may not tell the story.

Here are the questions:

1.Who is in the building?

2.Why do they chose to be there as opposed to another building?

3.Why is it being sold? No one sells passive cash flow. What's not passive about it? This may be legitimate or may be trouble

In other words, study the psychology of the situation as closely if not more so than the numbers :)

That's simply just not true that no one sells positive cash flow. Off the top of my head I can think of a few reasons...

-Burnt out landlord

-Owners plans to 1031 into a bigger property

-Selling a building they had inherited

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All Forum Posts by: Anthony Palmiotto

Anthony Palmiotto has started 26 posts and replied 111 times.

Post: Looking For Agent in Northern NJ (Multifamily)

Post: New Member From South Jersey

Post: Insurance Rates for 6 Unit

Post: First Multi-Family Property Acquired

Post: Management options for 32 unit apartment

Post: Guidelines To Help Determine Property Grade - A, B, C, or D

Post: Housing cycles-multifamily

Post: Typical splits for investors

Post: First year investment analysis!

Post: Multifamily Due Diligence