All Forum Posts by: Benjamin Aaker

Direct mail works for large multifamily, but it's much less likely to get a lead and it takes longer. You need to be in it for the long haul if you get started. These owners are usually more sophisticated than the typical homeowner and your mailings need to reflect that. 

Depends on your long-term strategy. If you are looking for a place to put your money and only planning on buying one property, go with cash. I suspect since you are on BP, you aren't looking at this property as end-game. If you buy with cash, you won't have any left to get the next one and will need to rely on cashflow of this property to save up for the next one. Do the calculation. That'll take years. If you want to do more, getting a mortgage is the way to go. Start searching for that next deal right away.

I use the 50% rule for my large multifamily deals. It's a ridiculous estimation that misses a lot, so why even bother? It's easy and quick. Use this as the first tool to evaluate a deal. You will (should) be looking at many potential deals for that great one and the 50% rule helps you weed out the terrible ones. Most people interested in selling will tell you what they bring in annually in gross scheduled rents. Knock off 50% and you'll arrive at an estimated NOI, which you can use to calculate a value. If the seller's value is much higher than that, close the book and move on.

Once you've purchased it, your actual expenses should fall below 50%. Over time, you will have enough properties that you will know your typical expense ratio and you'll throw away the 50% rule and use your own.

The Expense Ratio is one of the quickest ways you can evaluate a deal, but don't just use it alone. Use it as the first of many tools in your evaluation. 

You won't be able to personally inspect each unit. General condition on the walkthrough is important. If the common areas inside and out are not cared-for then neither are the units. Talk to the worker at the front desk of the property. They deal with the tenants day-to-day and don't usually have any financial interest in the property. They are more likely to give you an accurate picture of the tenants. All the rest of the physical condition you can save for your inspector.

Finding deals has gotten a lot more difficult. Like many have said in this thread, investors are clamoring to invest in deals, but the deal that will give them what they want is hard to find. Multifamily owners are still able to sell at high prices as cap rates have continued to be depressed. The longer the eviction moratorium goes on, the more likely government assistance with rents dries up. Stay vigilant for that time and watch out for the values to crash.

Syndication! Requires less personal cash and allows you to leverage to bigger and bigger properties. It takes only two things: continuously finding deals and continuously finding investors. And for goodness sakes, stop fixing toilets yourself.

Still loving it. Even with the pandemic hassles it is going great. There will always be issues to overcome, pandemic or not. It would be boring without it.

I use AirBnB and VRBO for stays above 3 days. It's so much nicer to have more of the items I appreciate in my own home: kitchen, bigger space. For shorter stays or without family, a hotel is a more convenient. 

Hey BP community! I've obtained 20 acres just outside of Sioux Falls, SD. Flat farmland but in the next 5 years will be annexed into the city. Are there any experienced landowners or developers in the area who can give me some per-acre hard and soft costs to develop in our area right now (2021)? Thanks in advance.

It does look like you've put in the work. Get it for <43k and I suspect you will do well.