All Forum Posts by: Bradley Jernigan

From my experience, I have learned repainting a building can immediately upgrade the exterior of a building. Also addressing exterior elements such as as siding, windows, doors and landscaping can all improve the curb appeal of a building. Are there any other exterior additions that can draw attention to tenants and improve the value of the property?

Has anyone used VAs (virtual assistants) for help with managing properties and tenants? If so, has this been effective with improving efficiency, tenant satisfaction, and overall business operations?

There is currently a high demand for owners to implement section 8 housing but that is an area I am not familiar with. What are the pros and cons of section 8 housing? Is this something I should look into as a owner of an apartment building ?

One thing I learned is turning over units can be very costly. A quick way to keep expenses low is to have tenants stay in the unit rather than move out when their lease is up. What are some ways to prevent tenants leaving after their lease is up?

Finding a multifamily deal in a growing market is very important because of market appreciation. Market appreciation is where the value of your property increases due to an increase in home prices within the area. Some advantages include:

1. Increased Property Value: Market appreciation can lead to an increase in the value of your multifamily property over time. This can result in higher equity and potentially greater profits when you decide to sell

2. Higher Rental Income: As property values rise, you might be able to increase rental rates, leading to higher rental income. This can improve your cash flow and overall return on investment.

3. Leverage Opportunities: With a higher property value, you may have the option to access additional financing through refinancing or securing a home equity loan. This can provide you with more capital for other investments.

4. Exit Strategy Flexibility: When the market appreciates, you have the flexibility to sell your property at a higher price, potentially realizing significant profits. This can be especially beneficial if you're looking to exit your investment.

5. Attracting Investors: Positive market appreciation can make your multifamily property more attractive to potential investors, as they see the potential for capital growth in addition to rental income.

It's important to note that market appreciation is not guaranteed and can vary based on economic conditions, location, and other factors.

One of the biggest blockers I have seen from potential investors has been them not having enough capital to get started within owning real estate. If you do not have enough capital for a multifamily property then here are some tips to help you out with raising capital:

1. Create a Solid Business Plan: Outline your investment strategy, property details, projected returns, and the risks involved. A well-structured plan helps build investor confidence.

2. Build Relationships: Establish a strong network within the real estate and investment communities. Building trust with potential investors takes time and effort.

3. Highlight Your Expertise: Showcase your experience in real estate and specifically in multifamily properties. Investors want to know they're entrusting their money to someone knowledgeable.

4. Transparency is Key: Be open about risks and challenges. Honesty builds credibility and demonstrates your commitment to a successful outcome.

5. Define Roles Clearly: Clearly communicate the roles and responsibilities of each party involved in the investment, including your responsibilities as the sponsor.

6. Target the Right Investors: Seek investors who align with your investment goals and risk tolerance. Not every investor will be the right fit for your project.

7. Offer Attractive Returns: Present a compelling financial package that includes potential cash flow, appreciation, and other benefits for investors.

8. Address Investor Concerns: Be prepared to answer questions about the property, market conditions, exit strategies, and potential challenges.

9. Legal Compliance: Ensure you comply with securities laws and regulations when soliciting investments from private individuals. Consult with legal experts to structure your investment offerings correctly.

10. Professional Presentation: Create a professional pitch deck or presentation that clearly explains the investment opportunity and your plan for success.

11. Show Past Success: If you have a track record of successful investments, highlight them to demonstrate your ability to generate returns.

12. Offer Multiple Investment Levels: Provide options for investors with varying levels of capital to participate in the project.

13. Address Exit Strategies: Outline how and when investors can expect to receive their returns, whether through cash flow, property sale, or refinancing.

14. Follow Up and Communicate: Keep your investors informed about the progress of the investment and any relevant updates.

15. Offer Investor Protections: Consider offering preferred returns or other structures that prioritize investor payouts before sponsor profits.

I believe tip number 10 is the most important as a pitch deck should have all the required information about your upcoming deal. Remember, it is extremely important to already have a deal under contract before reaching out to investing partners. It is hard for anyone to turn down a great deal that will offer great returns!

One of the best ways I have learned to find potential deals has been to drive for dollars. Some advantages include:

1. Local Insight: Driving around neighborhoods allows you to gain firsthand knowledge of the area, understanding the local market conditions, amenities, and potential investment opportunities.

2. Hidden Gems: You might come across multifamily properties that are not actively listed but could be potential deals. This gives you an edge over competitors who rely solely on public listings.

3. Direct Outreach: Identifying distressed or neglected properties gives you the opportunity to directly contact owners, potentially negotiating a better deal without the competition that comes from public listings.

4. Off-Market Properties: Many lucrative multifamily deals never make it to public listings. Driving for dollars increases your chances of discovering off-market opportunities that others might overlook.

5. Property Condition: Assessing properties in person helps you accurately gauge their condition, potential repair costs, and overall investment feasibility.

6. Less Competition: Since driving for dollars is a proactive approach, you face less competition compared to online listings or real estate auctions, potentially leading to better deals.

7. Market Research: As you explore different neighborhoods, you gather valuable insights about rental demand, tenant profiles, and property management challenges in those areas.

8. Creative Opportunities: Driving for dollars encourages creative problem-solving, as you might identify properties with untapped potential for value-add strategies or redevelopment.

In my experience, I believe the quickest way to start multifamily investing is to first educate yourself about the real estate market, create a solid business plan, and network with professionals in the industry. Partnering with experienced investors or joining real estate investment groups will help you gain insights and access to be apart of potential deals.

Are there any real estate investor meetups within the DFW area? I never been to one but am curious does anyone find the meetups helpful? Leave a comment or reach out to let me know what are some advantages! 

I love value-add deals but there are still some multifamily properties all investors should avoid. Multifamily properties with significant structural issues, poor location, high crime rates, and properties in areas with declining economic prospects are all bad signs. Additionally, properties with a history of mismanagement, extensive vacancies, or unrealistic financial projections should also be approached with caution.Not all deals are good deals. Thorough due diligence and consultation with experts can help identify potential red flags.