All Forum Posts by: Brandon Willingham

Scott, I appreciate your response.  Coaching has its place, and as someone who is doing his due diligence on coaches, I was a little concerned. I was confused because your post made it seem like those topics were not covered, I'm glad to hear it was, and I'm glad to hear about your success due to them. 

Good luck on finding the right investors for your business. 

I apologize if my post came off rude, I didn't mean for it to. I'm genuinely interested in what value the courses/mentorship provided if the subject of raising investor funds was not taught.

I believe this is the hurdle a lot of people face without a strong network of investors already in place. I will say this, after reading all the books by Lindahl and reading about Fairless, those are the top two people in the industry and are very expensive to hire. Don't take this the wrong way, but I would expect the basic topic of raising money from investors would be included when your paying 8k-20k in syndication instruction from a mentor. I mean Joe Fairless charges 9k the first month to work with him and he teaches syndication. The whole point of syndication is to find investors. I'm curious as to why it wasn't covered. I was debating on hiring either one of them to help my business, but unless I'm missing something, it seems the fundamental topic is not covered by them; I'm glad I didn't spend the money.

Pragya,

I am an investor who lives in Hillsboro and co-sponsor for a local multifamily group, we should get together for coffee sometime and discuss investing. Feel free to PM me. To answer your question, I do not have any experience, but just came across Marshall Commercial Funding in Portland. They are a broker who specializes in multifamily. They have a lot of information on their website and will look at financing my next deal through them.

Kody,

I am looking for identical repositioning opportunities as well. We have some of that type of development here in Portland. The issue that I see is that cap rates are already compressed for those buildings that making the numbers work is hard. We have some new development, and those Class A areas top-notch for with all the latest tech. One of my friends pays less then $30/month in utilities due to green construction. But they will also be the first to scale back rents and have vacancy in during a pull back. I am finding the repositioning in my market really works for B/C class. I like your strategy, as I have the same one, and would like to find an older metro building and reposition it.

Now that we have a shared strategy, hopefully someone will post most concise locations. Here is what I am looking at:

States without rent control due to repositioning strategy. Areas that the short hold reposition makes sense.

Dallas, Indy, San Antonio, Raleigh, Charlotte, Fort Worth, (Iffy: Portland, Seattle, LA).

I like the reposition strategy because as long as you have the market research done, it is not a long term appreciation play. Where as I would have a larger long-term commitment in area. This means I can look for opportunities almost anywhere.

Do you have a business plan in place? Do you know your target tenant profile (age, salary range, consumer taste)? For example, millennial's might prefer a mixed-use development in a city whose IT/Finance sector is emerging vs a tenant profile of baby boomers in a retirement sunbelt area. Identifying these will also help determine what class profile you want. Do you know what class of property your looking for? What will be your hold time? Different class properties perform different through market cycles. What is the market cycle criteria for your investment? Remember, the same city can have different market cycles based on neighborhoods. If your looking at a sellers market and your hold time is long, I would say be prepared for a depressed market. If your buying in a buyers market, your hold time will be different.

What are your requirements before you invest in a market? What industries/tenant profiles do you want to invest in? Whether you like blue-collar or white collar professionals, there is opportunity and risk in both, just identify your preference and see if the market supports it. What is the market looking to do in order to bring jobs, population growth and incentives to businesses and developers in the area? Look at the city's master plan. Is the city/county/state tenant or landlord friendly? What laws are in place in the area?

Example is Portland. New laws make it hard to reposition the asset, think fix and flip multifamily. This is because it no longer makes sense to have a large capital outlay for deferred maintaince upon acquisition and fix it up, if you can only increase rents 10%. After 10% you have to pay your tenants moving expenses. Portland is passing new rent control (we will see what happens), so in my humble opinion, even though cap rates are low, it is still a good buy and hold opportunity for rent growth over the long term. Look at every other place that has experienced rent control and limited development boundaries. Also, know if where you want to invest is development friendly or has boundaries for growth. Therefore, one strategy might work, while another might not work in the same market.

Are you looking for higher cap rate value-add or more stable lower cap rate opportunity? Are you looking for forced appreciation through repositioning or stable cash flow (we all want both, but which one is the priority)? What are your return metric criteria (IRR, Cap Rate, Cash on Cash)? Do you use a pro forma or any financial modeling? Are you looking to have professional 3rd party management? How many units are you looking at?

As an investor I am sure you already know all of that. But these are all questions that need to be addressed when looking for markets. My biggest piece of advice is to identify your tenant profile, find the market for it, and determine that market's cycle. You can also backwards engineer that, by looking at what is working in a market, and adjust your target tenant profile to match.

While reading these forums, I have to come to realize that among other things, the wholesale needs a big trait: the ability to recognize deals, accurately analyze the comps and rehab costs, identify the exit costs, and pass-along the value to the investor while taking a small profit. As a future wholesaler/investor, I feel that my strongest ability lies in this mantra. My finance experience doing buy-ins, DCF with repairs (added capital) will aid me in property valuations. I also understand that in order to build and maintain ongoing value creating relationships with investors on my buyers list, I must provide value to my client (the investor) or they will end our business relationship. I also believe in honest business and doing whats right for all parties (utopia, I know!)

Please feel free to tell me if I am way off base or on the right track.

@Mark Ferguson: sounds great Mark, thank you for all your help. Maybe we can talk one day offline about being an agent. After the military I am looking at either becoming a real estate agent or working in retail investment sales as a financial advisor (Merrill Lynch, Edward Jones).

Mark,

Thank you for the reply. Being a broker, I know that contracts are your lifeblood. Do you have any recommendations on how to go by comprehending this a little better? I have downloaded the Colorado DORA Division of Real Estate's and I am going line by line. It seems there are something's I still do not understand. Also, how do you like being an agent, and how has it helped/harmed you in developing your business?

Michelle,

Nice to meet you. I am a new wholesale/investor in the Colorado market as well. I have learned tons of useful information of this website! I love the Golden area, and you have picked a wonderful place to live and invest. By any chance did you attend Mines? I almost went there for Petroleum Eng.