All Forum Posts by: Account Closed

I agree it’s super frustrating... my guess is we have similar personality types. A good piece of advice I got when voicing similar concerns to a more experienced investor was “it’s better to wait on a good deal than fall on a bad deal”. That said, sometimes I have to learn the hard way ha

It is a common wholesaling strategy. Honestly, I am not sure if it is even legal. Never done it myself before. 

I think its a mixed bag about who you might find from those signs. Some of the best wholesalers I know market in literally every way possible (including signage). Who knows? You might meet a great business partner. 

Nope.

There is no real right answer here. I think it is a good thing you are putting some hard thought into how you might scale. 

Personally, I think going bigger is better if you have the team in place to get things done. In other words, if you can find an equity partner with experience in multifamily acquisitions I would go down that path. 

In general, I agree that a discounted cash flow analysis is the correct analysis. This probably depends on the level of sophistication of your investors, but I would consider this a kind of "incremental analysis", similar to an incremental IRR calc that could be run on a staged investment.

In other words, I would look at the annualized return until the point of refinance. After, refi the equity in the deal will be lower and so will the cash flows. I would rerun the annualized return calcs after this point. 

Assuming that your off market property is indeed a knockout deal, I would start pitching to your network and try to find partners. I think in your case it would almost be a necessity to find a partner with some real experience in the MF space. That said, if they are serious and the deal is serious they will listen. Sell them on the opportunity. If it is a killer, you will find the money. 

I think you have a good idea in my opinion. I have two questions, one is a bit more technical and one more business related. 

I used to work at MIT on machine learning algorithms and decision support tools. The concept is a little different, but we essentially made tools that would have practical applications such as the tool you propose. 

From a technical perspective, one challenge we constantly faced was how to process large amounts of data with lots of noise. It sounds like the technology has been proven so this might not be an issue for you, but one thing we found was that our technology was much more difficult to apply in the real world rather than our simulated sample sets. A lot of this had to do with the pure volume of data - especially, when you are trying to predict or identify rare events. If you have not already tested this at a property, I would suggest that you quickly make an MVP and install it somewhere. Iron out the bugs early. I apologize if you have already done this, but I figured I would share my lessons learned in case it helped. 

From a business perspective, I think that 1% gross rents is pretty high for this type of product. This type of product would best apply to large properties in my opinion (100+ units), because they have the revenue to sustain these types of expenditures. Typically management companies charge 3-5% for their services. 1% for enhanced security seems pretty steep. 

Value add repositions on multifamily assets. All day, every day. With that kind of money you could really scale. 

I'd probably take a little out first and take my wife on a good vacation... she deserves it considering all I put her through haha 

Location is very important.

I wouldn't ever recommend buying a property purely for expected appreciation. The cash flows should support the purchase. That said, I would recommend being strategic about your target locations. Try to find areas with sustainable employment, job growth, and population growth. DRIVE the markets. If you think about it, you are providing a product to your tenant. What type of tenant do you want in your property? What level of income must they have to achieve your expected rents? The location is one key variable that attracts the tenant. 

In my mind you have two variables here (1) marketing, and (2) price. Both should drive demand for the property. It is not currently clear which is the problem. I think the simplest recommendation would be to control the problem sequentially. Market the property every way possible. Several good ideas were already mentioned on the thread. If that does not drive demand, then start progressively lowering price. 

Good luck!