All Forum Posts by: Chris Salerno

Every single syndication sponsor and capital raiser claims that they have conservative underwriting.

Now, I am no logician or statistician, but I have to call BS on this one. Not everyone can be telling the truth.

Clearly, at least half of these folks are mistaken in their claims.

Since 2011, you can make a lot of mistakes on a deal and the investors still made money. My question is, are there any key metrics that you use to determine whether these claims are true? Any specific numbers you plug into your own model, or questions you ask the syndicator?

Another thing that I see is some firms charging 3% of the purchase price as the asset acquisition fee or 2% as the asset management fee and disposition fee, and then they say this is industry standard. This one is much easier to vet as you can have a mental model for approximately what the standard fees and splits should be from looking at many deals. The average I am seeing for a typical deal is 2% AF, 1% MF, 0-1% refi, 1% DF. But I've definitely invested in deals with higher numbers than these, if there was a compelling reason to do so.

Would love to hear your guys thoughts on this.

Thank you all for you insight!  While it does sound amazing, not necessarily trying to sit on the beach retired in 2 years, but trying to figure out how to best replace my W2 income and then essentially change careers.  

@Chris Salerno - I noticed your company is MultiFamily syndication....in your opinion, do passive investors get enough insight into the operation to learn it while being passive?  

Overthinking about overthinking. Newbie here and planning on learning, reading, practice analyzing and just getting myself as educated as I can before I make any first moves. But my questions is regarding priorities. I have a small-ish amount of consumer debt ($10,000) and not nearly enough capital saved. So do you think it's smarter to focus on getting rid of the debt first and THEN save (might take 1-2 yrs) or focus on saving capital first to get started sooner?

For someone that is just starting out in real estate that wants to learn the business. An really profit from it in the long run. Where should I begin? Just like anyone else I want to build a financial wealth for my kids. With me being a young father and limited on funds due to me taking care of kids where would y’all suggest that I started. I’m assuming wholesaling but I would prefer to have some pros give me some assistance if possible. I’m open to anything and everything and just ready to make a future for my kids without me having to miss there life’s. The care business sucks!!!!

Hello,

Today I read "Set For Life" by Scott Trench. It got me thinking about my current situation with my 401(k). 

My background: I am 25 years old and am focused on absorbing as much information as possible about real estate investing. Currently I rent, but here in the next 4 months I am planning to purchase a duplex in my area and house hack it living in one side with roommates while renting out the other side. After that I will focus on multifamily properties and grow my portfolio from there. My goal is to achieve financial freedom by age 35. Right out of college I was a commercial loan officer for a couple years and now I work for a financial tech company that caters to banks. I contribute 6% to my 401(k) as that is what is required to get my company match.

My plan is to keep my 401(k) balance where it is (not withdraw) as I don't want the tax burden, but my questions is... Would it be better to stop contributing to my 401(k) and use that money to invest in real estate instead? My thought process is that if I am wanting to "retire" by 35, investing in my 401(k) doesn't seem to align with that goal very well as that capital is locked up until I turn 59.5 and can make withdrawals. Wouldn't it be better to put that money toward real estate to accelerate my investing early?

Thanks,

-Joe

Hey BP community!  

I just met with a lender and I qualify for a 350k mortgage (currently dont own anything).  I also have 300k cash on hand and own a GC company so can have some work done at cost.

I live in Maine and would like to invest in my state.  What should next step be?  My annual income is currently 90k from my job.

1) house hack 1 large multi?

2) Brrrr the above multi

3) buy more than 1 property right away?

4) partner on a larger complex (I have a few potential partners lined up)

how would you guys best leverage my situation?  

Thanks in advance, 

@Chris Salerno

Thanks for the congrats! I'm definitely hoping this project gives me some momentum!!! I need a development guru now, lol!

Hello Bigger Pockets Forum,

I am located in Los Angeles, CA and have just graduated college. I am liquid 100k cash. My best bud from childhood is in the same boat with 100k cash. Together we are looking to start our real estate empire with 200k working capital. 

I really love the Brrrr strategy and maximizing cash flow. Although a flip is also appetizing for the short term profit. 

The market is pretty high in Los Angeles although we are extremely connected and have access to lot of off market deals for when we have more money and are smarter. 

The next market where I am most connected is Dallas, Texas and it appears the price for property is much cheaper and in our range.

What type of advice would you give a young entrepreneur in these shoes ?

And what type of real estate strategy would you start with first to initiate the empire?

I am a new investor in the Tampa Bay Area..I purchased my first rental property last year, and am currently rehabbing my first fix and flip . As of right now I only have enough capital to do a flip or two at a time. But I've found a large multi family that seems like such a great deal that I am looking for a way to make it work. It's six duplexes on one lot. All units are 2/1 and tenant occupied. Net operating income is 90300, net operating expenses are at 22000. Seller is asking 778k. So just above current value based on cap rate, income, etc. Current rents are 625 per unit which is very low for the area. I own a rental in the same neighborhood. Units like this rent for 750-850 easily. The properties do not look to be in bad shape, the grounds are well maintained. A rent increase to 750 per month should bring the value to 988k. The way I see it if I can just find an investor for the down payment I can easily refinance their money back out once I add that value, and pay them back with interest. So far though I haven't been able to find anyone. Any help as far as if this is a deal I should continue to pursue, and any tips on how to find a way to finance it would be greatly appreciated. Thanks for any help or input. 

I may be moving to Greenville SC area next year for work. What is the REI community like in Greenville? What kind of multi-family stock is there? Any observations on market trends?