All Forum Posts by: Charley C.

@Tony Gunter

Every time I looked in to those areas like that, I find those areas have loads of competing investors that have been there a while. Way to many of them trampling fields taking all the the good deals long ago. If I did that (just saying if I did it, not you) I would be like trying to play against the NFL with a college team. 

Might I recommend a very VERY over looked area poised to explode in value and produce a better cap rate in the meanwhile..  Try the Rio Grand Valley in Texas. I see a million or more people there and with hoards of them very well educated.  The culture there supports a high standard of work ethic and the Latin family support system educating then young people with trade skills (you wont see family units teaching trade skills in Cedar Park or any other hipster location). Those people know how to work and like to work. Companies can find smart employees. we are talking well educated to have good cognitive capabilities at $25-35,000 a year. None of those places you named have that, not even close.

Its just a matter of time before other companies figure it out 

The best part by far, there is not a whole lot of savvy investors in South Texas. Commercial purchase prices are super cheap. The investors I see there? are just a few doing fine, comfortable with a real lazy small thinking routine while making a fortune. (see there you would be like the NFL playing against the college team) 

If you got a couple of million liquid for the RGV, you would have leverage like Elon Musk, calling the shots.

Full disclosure: Yes, its self serving advice I just gave you but it's still true all the same.

My favorite areas are the most populated ones like Mcallen and the dozen cities that surround it to form one big metropolis. However, I hear Brownsville is on fire as well. and I don't consider Corpus Cristi "The Valley". Stay with in 10-20 miles of the river to see what I am talking about.  

Good luck  

I think I would be all over that. The parking ratio ought to be fantastic. If tht was near me, I would of already made an offer

Just plan on gutting it to the studs and working your economics from there.. and you better understand how to build apartments or DO NOT DO IT

One last thing, plan on no money coming in while you are stuck in construction, that can be a while in todays new world. Supply chains are very very jacked up..  

Good luck

@Lucian Guadagnoli most answers to a question start with "it depends" 

I can tell you new builds are over $100 a foot (more like $130-150) with out the land (so add the cost of location to that) so that would be the most, then adjust downs from there

the phrase "it depends" applies to location, quality, functionality of the floor plan. Like I can tell you open floor plans with an open kitchen will fetch higher rents than a galley kitchen.  

another big "it depends" item is washer and dryer connections, not having that will make the property a very sub-par-dated property for example. 

at the end of the day, the biggest driver is:

its rental income

and cost of management and if tenants are good payers

cost of maintenance

and in Texas (lots of places in Texas experience this), an appraisal district can torpedo local sales prices by harassing us very high values, making more owners want to sell and get the hell away from them.. many taxing authorities net more off an apartment property than some of the apartment owners around here... just saying that is a real factor you have to consider always but often over looked

and insurance, we got hurricanes really screwing us over on insurance, that will drive down values too

@Phillip Christie   wow you got a lot people chiming in, this is a great community here. 

Phillip, I seen where lenders ask for inexperienced people like you to have an experienced property management company to manage your property, and if can pay for that while your DTI still qualifies your loan, then you are in luck.

That said, make sure you got a way to cancel your PM agreement without penalty incase you want to fire them or just want to do it yourself after your loan funds

Good luck
 

@Chris Cambridge

Thanks for that Chris. Very handy information. I had to complete construction and get things sort of stabilized so now I am ready. 

I do have one good question. Nationwide lending wants 100,000 population? Then how many miles radius are we talking? Make it 20 miles and we have no problem, make it 10 miles and we have a problem (and I really want an agency loan to hit the better rates)

There is always a reason property is "cheap". Without dry rot, there would be 90% less properties to flip out there. You need-needed repairs to get sellers to sell cheap. I never been lucky enough o find a flip that did not need repairs or improvements

That said, I always find more dry rot once I start digging behind the veneer.. hedge the hell out of your expense estimate. Most likely we always had to "shore up" the frame and weight of the building with beams to just hold up the roof while we worked to replace the rotted timber.. it actually gets kind of dangerous at times.

Moral of the story, peel off the veneer or sheet rock until you see no more dry rot, then you can estimate the cost

You lenders ought to love this post

Hi, I am studying the benefits of refinancing into a lower rate. I am wrapping up the construction of an apartment complex (about 40,000 sf 34 units, Class AAA little over the top in quality). Would need just under 5 mill. I would like to lock the rate for a minimum of 5 years may be even longer. 

My revenue is about 35% student housing I think that knocks me out of fanniemae but what about freddie ?

Gross income is a little over 51,000, loan balance 5 mill after prepayment penalties closing cost etc. 

I was wondering about the interest rate and lender fees. The loan's closing can of course be contingent on completion and occupancy.. paying a little over 5% now but very exposed to changes in the market interest rate. My credit, experience, alternative income, my cash to the deal is going to be fine on the application

Only interested in loans that are fixed for at least 5 years. I prefer longer than 5 years looking at an easy 70LTV

Post here things like the names of lenders, interest rates and the market, certainly welcome to post that here. However, if you want to ask questions about location and specific details please send a message
 

I am pretty sure my drywaller makes plenty, 6 figures for sure. Now that guy would be a great tenant but not all of them run their finances well. Its the other things in their life you got to look out for

have him email you any documents so they are wired, that would give you a really good jail-time card to play in case you have to evict

I been hiring these "subs" (aka drywallers) for years and years and the best ones with the hardest working guys, end up with the IRS chasing them (they pay their men in cash) . Statistically over half would end up serving a little time to just reduce a tax levy in the millions of dollars..  Irrespective of what the bank records say, run a court records search

@Derek Pullen better late than never, thanks for that information. 

that case, was where the landlord did have another apartment in another building for the ESA dog so it kind of mucks up the water. That's a whole lot of text to read (found myself skimming though it instead of reading every word)  but did see where the author sited many other cases that could be explored.

Really needs to be different rules for student housing, where 4 people (4 leases) live in the same apartment. Where are the rights of those tenants who don't want to cohabitate with pet odors, dander, hair, pee and poo? Tenant could be living there no problem then out of nowhere, one of the roommates shows gets a letter from a real doctor allowing them to bring in a musty smelling dog  

if the contractor is incorporated, you dont have to file the 1099,

or if its under $600, you would not have to file that 1099