All Forum Posts by: Chase Gu

@Omar Khan @Michael Le Thank you so much for your response! 

How do investors and syndication team typically split the profit then, when investors put in say 30% and GP raised 70% through financing? Do the investors receive 30% of the profit minus certain fees that goes to the GP? 

If the limited partnership/LLC raise capital through financing, and the LLC bankrupt, do investor (LP) have to pay the liability and does LLC bankarupcy affect investors' personal credit score?

What I am trying to do is to assess the advantage/disadvantage of participating a syndication deal (likely a much larger property) vs. buy my own smaller property. 

Thanks again!

Hi - Many of the multi-family properties I have been looking at were built in 50s or 60s. Rarely did I see newer properties built after 80s/90s. Do you only buy properties that were built after certain years? I am worried about the high maintenance cost of older building.

Thanks a lot!

Chase

Hi - I have been reading posts about multi-family syndication. I wonder how the syndication works. Are investors LPs and the syndication guy/company as the GP? I assume these syndication deal are all-cash deals? No financing involve? Otherwise, how does financing work when you have so many investors?

Thanks a lot!

Hi - Many of the multi-family properties I have been looking at were built in 50s or 60s. Rarely did I see newer properties built after 80s/90s. Do you only buy properties that were built after certain years? I am worried about the high maintenance cost of older building. 

Thanks a lot!

Chase

Hi -  I have been reading posts about multi-family syndication. I wonder how the syndication works. Are investors LPs and the syndication guy/company as the GP? I assume these syndication deal are all-cash deals? No financing involve? Otherwise, how does financing work when you have so many investors? 

Thanks a lot!

@Christopher Phillips  This is really helpful! Thank you!

Hi, I am learning about commercial loan terms and will meet with a lender on Monday. Hope someone could answer some basic questions I have!

1. People on the forum mostly talk about short-term fixed rate loan for 5-7 yr with a 20-25 yr amortization. This means one has to refi every few years? So I have to budget for refi cost when analyze a property? 

2. Is long-term fixed-rate not an option? I was looking at Fannie Mae small multi-family loan. Is that difficult to get because of specific requirement, like high occupancy rate? 

3. People say the best rate comes from local bank. I invest out of state - does this mean I talk with local lenders where the property is located or where I am located? 

4. Any important questions to ask the lender? Like their fee, etc?

5. For residential, I know the maximum loan I can take out. Does it work this way for commercial loan? I ask because for commercial loan lender needs to know NOI, which is property specific.

Thanks!

Thanks for your response, everyone! 

I only buy property with positive cash flow and I do my best to be conservative in my assumptions. And I am flexible with cap rate as long as the cash flow makes sense. 

A few follow-up questions:

For a budget around $1M (property value), is 5-20 door a reasonable expectation? Which is better - one small apartment or 3-4 triplex (residential)?

@Sam Grooms @Ivan Barratt  I agree with you that out of state investment in small mfam might not be a good choice. However, I do not find small mfam deals in metro DC area. It is possible (but difficult) to find some deals within 1.5-2 hours of driving. But I still need a property manager. What would you do in my situation? 

What criteria do you use to evaluate a small mfam deal besides cap rate? Cash flow per door? If so, what is a good cash flow per door? I know it is different by market, but is there a good rule of thumb? 

Also what conservative assumptions you use to evaluate a deal (initial screening)? For single family property, I assume one month vacancy and 40% expense (I self-manage) and I look for 150-200 per month after mortgage (Again this is in DC metro). For small mfam, what assumptions do you use? 

A few responses mentioned one needs to work hard to look for deals. That is what I am doing - not sure if it is enough though. I am meeting people from my local REIA. I researched top producing agent/wholesaler in my target market and talked with them and try to build long-term relationship, and also ask for referral. I know it takes time to build relationship - especially for a first time small mfam buyer. Anything else should I do to look for deals? @Henri Meli What creative approaches do you use to find deals?

Again, thank you so much! I know I have too many questions!

Hello, fellow investors. I have several single-family rental properties and I am in the process to buy my first multi-family property. I am looking for small apartment with 5-20 units (also interested in mobile home park). I have several questions I hope you experienced investors can help me with.

1. Is now the right time to invest in small apartment? I know multi-families are hot and the cap rate has been decreasing in the past few years. Is the price too high right now and thus not a good time to enter market? What stage in the cycle is multi-family at?

2. I will invest out of state. Where can I still find properties with reasonable cap rate (8%?) and cash flow? I am doing research for Tampa/St. Petersburg and Triangle area in NC. I am looking for areas with strong job opportunity and growth potential and where multi-family has not yet peak. 

Thank you very much in advanced for your response! 

Chase

Hi, Everyone:

I am Chase and I joined BP several weeks ago. I am from Northern Virgina, close to Tysons Corner. I mostly buy and hold properties for long-term investment and I also invest in syndication and crowdfunding deals. 

Right now I have a few rentals in Sterling (I am self-managing), which I bought a few years back. But the property price has since increased so much in the past couple of years and I could not find much deals close to where I live. 

I have been thinking to invest out of state. But frankly I am nervous to invest out of state. I have to find a good team I can trust, which could be really hard. I also feel I do not have much control on out-of-state properties. So for now, I want to keep looking for opportunities closer to home. 

Here is my question: for those familiar with Greater DC market, what are the best places to find rental property deals? I am looking for 3 BR, 2 bath, 1200-1500 squre foot, single family/town house (2-story), in a class B neighborhood. Price range: $100-$200K, monthly rent 1% of purchase price or higher. Tenant pool is very important to me. Dealing with difficult tenants in exchange for a higher return is not gonna work for me as I have a demanding day job. 

I do not mind places with 1-2 hour driving from Tysons. But anyplace more than 1 hour driving, I will have to find a PM. I have been tracking some properties in Fredericksburg and Stafford but I am not familiar with the area. I am also open to properties in Maryland. 

Any suggestions are much appreciated!

Thanks!

Chase