All Forum Posts by: Charles Carillo

@Ryan Keenan

Make sure you get that in writing from the bank that they will not accelerate the loan payments if ownership changes. Speak to your real estate attorney for the correct wording and process but this is a problem I have run into before. Every time I called the bank, I got a different answer so when my attorney told me to get it in writing; the truth came out, that you cannot change ownership (I guess I could have if I wanted to reapply for the loan - but that is not a probable solution).

@Fola Babatunde

It might be easier to find a partner with funds or finding a seller who will hold a second position note. The problem here is that most senior debt lenders do not want a second position on the property since they do not want to deal with them if they need to foreclose. When getting a loan for the down payment; you are really looking for mezzanine financing which is a mix of debt and equity financing; usually reserved for large commercial projects operated by seasoned investors.

@Danni Green

You can go to the city or county and find the name and address of the owner. Send them a letter. You might also be able to find their phone number.

@Jacob O'Connor

Cap rates will change by market and class of asset but we have cash-on-cash targets depending on the size of the property.

Over 300 units. Most lenders require several months of reserves and agency lenders are usually requiring 9-12 months of reserves, so most property owners should have a reserve of some sort from the beginning which is mandated from their lender.

@Steve Spencer

The PM should be handling; leasing, turning units, tenant requests, scheduling handyman and contractors when required as well as normal inspections. We like to handle marketing on our properties and bidding out capital expenditure jobs.

In regards to fees;10% seems a little high for 30 units; however it all depends on the total fees. Most charge a leasing fee, some charge a renewal fee. What is the per hour cost for their handyman? Do they have good relationships with licensed contractors?

@Dhiren Ahir

I have used this method of investing before. One of the benefits with this strategy is getting a cash discount when purchasing quicker without a lender but that does not seem to be the case here.

Working with lenders when refinancing is much easier because you already own the property so there is no time crunch if/when fees arise that are higher than estimated or never previously disclosed; you are able to simply say "no thank you" and move on. You also have a lot more room to negotiate.

I would purchase the property, perform renovations and value-add, refinance and repeat.

@Jonathan Scheeler

If the properties are close to each other my goal would be to have as many units as possible to lower the property management expenses on a per unit basis. Now, if you know certain properties are running terribly and you do not want to fix them, why don't you get a separate loan from the seller for each of them? So if you are purchasing 10 properties and 2 you are going to want to sell, get 3 mortgages, 1 mortgage for 8 properties and 1 for property 9 and 1 for property 10. We purchased a portfolio of 27 units and had it under 1 loan because we wanted the scale.

@Ryan Veil

Here are my favorite books:

Multifamily Millions by Dave Lindahl

The ABCs of Real Estate Investing by Ken McElroy

The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges

Commercial Real Estate Investing by Dolf De Roos

Trump: The Best Real Estate Advice I Ever Received by Donald Trump

Tax Free Wealth by Tom Wheelwright

Commercial Real Estate 101: How Small Investors Can Get Started and Make It Big by David Lindahl

Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money by Matt Faircloth

The Definitive Guide to Apartment Marketing by Josh Grillo

Investing in Apartment Building by Matthew Martinez

Crushing It in Apartments and Commercial Real Estate by Brian H Murray

The 7 Secrets to Successful Apartment Leasing by Eric Cumley

2 Years to a Million in Real Estate by Matthew Martinez

Burn Zones: Playing Life’s Bad Hands by Jorge Newbery

Commercial Mortgages 101: Everything You Need to Know to Create a Winning Loan Request by Michael Reinhard

It’s a Whole New Business!: The how-to book of syndicated investment real estate by Gene Trowbridge

@Patrick M.

Yes, landlords need to start evaluating a potential tenant like they are giving them a mortgage. Years back we would let some tenants rent with less than perfect credit and possibly a brush with the law but today you need to really vet potential tenants. Great credit, great income, clean background etc. Similar to every time the government gets involved, it ends up hurting the regular person since they are now unable to rent if they have any blemishes on their records.