All Forum Posts by: Chris Grenzig

Hey guys, we're excited to announce our next free monthly meetup!

We wanted to put together a small panel of experienced multifamily sponsors, syndicators and purchasers to talk primarily about the difference between small multifamily (<80 units~) and large multifamily (>80 units~). I'm going to be participating in the discussion somewhat, but acting more as a facilitator and moderator to generate some great conversation and ask important questions that we think everyone should know.

We're hoping to keep the panel going for 45-60 mins with a 15-30 min Q&A period afterward, which will also allow for 60-90 mins of networking time to get to meet anyone from the panel, but more importantly others that are attending that you can work together with on getting some deals done.

We are going to record the panel to the best of our ability for everyone to view afterwards, if you would like to see the video from our last meetup go to the following link on youtube: https://youtu.be/vpvdCnNnrN8

If you do plan on coming, please go to our meetup page and RSVP there also, because that's where we are asking everyone to go, so we have the best estimate on attendees in case we need to get a larger room.

http://meetu.ps/e/GGDBQ/zNqhq/f

The room is down the stairs on your left immediately after entering the hotel, the room will be down the long hallway in front of you on your right hand side.

Attire: Business Casual/Casual

Recommended Materials: Nothing required, but something to take notes with, business cards, 

Estimated Attendees: 30-50 (last month was 35, we expect more this month)

Free Coffee and water will be provided, with a bar upstairs available to order from personally.

Please try to arrive at 7 PM, we want to start promptly to get as much in as possible and leave enough time for everyone to speak with everyone they want to afterwards.

If you plan on attending or not we would love your feedback on questions you would love to see asked and answered by our panel!

We hope to see you there!

@Mike Lee this is our third and fourth acquisition in the area, with our fifth closing next week. Our first and second have had pricing guidance already that would be huge returns, but we are not ready to sell yet. We were apart of one other deal a few years back that did very well also, but we were not a major share of the deal.

Investment Info:

Large multi-family (5+ units) commercial investment investment in Jacksonville.

Purchase price: $5,646,000
Cash invested: $525,000

104 Units bought off market in conjunction with Whispering Oaks apartments apartments. Plan is to rebrand, landscape, exterior paint, and somewhat overhaul the exterior, renovate interior units and sell within 3-5 years after implementing our capital plan.

What made you interested in investing in this type of deal?

We target 100-300 unit properties built in the 60's-90's in several markets across southeast and midwest. We feel these have great upside with a good amount of downside protection.

How did you find this deal and how did you negotiate it?

This deal was secured off-market.

How did you finance this deal?

Freddie Small Balance loan 70% LTV est.

How did you add value to the deal?

Exterior/amenity improvements, unit interiors roughly 50% of the total, move leasing office from unit, to extra space in building next to laundry room (making laundry room much smaller with new laundromat next to property)

Investment Info:

Large multi-family (5+ units) commercial investment investment in Jacksonville.

Purchase price: $7,454,000
Cash invested: $650,000

Bought off market in conjunction with Highlander apartments. Plan is to rebrand, landscape, exterior paint, and somewhat overhaul the exterior, renovate interior units and sell within 3-5 years after implementing our capital plan.

What made you interested in investing in this type of deal?

We target 100-300 unit properties built in the 60's-90's in several markets across southeast and midwest. We feel these have great upside with a good amount of downside protection.

How did you find this deal and how did you negotiate it?

This deal was secured off-market.

How did you finance this deal?

Freddie small balance loan 75% est.

How did you add value to the deal?

Exterior/amenity improvements, unit interiors roughly 50% of the total, add 3 additional units in storage space.

@Sonny Sach IRR is equivalent to an annualized return, except it takes into account Net Present Value (NPV) of money; or that a dollar today is worth more than a dollar tomorrow.

High level, if you gave someone a 15% annualized return in cash flow every month for 3 years and no back end sale proceeds, your IRR and annualized return would be 15%, because it was 15% always.

If you did have of that in cash flow (7.5%) and made up the difference on the back end sale at the end of year 3 (22.5%), you would still have an annualized return of 15%, but you're IRR would be LESS because it took 3 years to get the extra money instead of throughout the entire period.

I haven't done the math to be honest, so in the first example they may not be exactly the same, but they will be almost the same where as the 2nd example there could be a couple percentage points difference between the Annualized Return and the IRR.

It's because it takes into NPV that IRR is generally regarded as one of the more important metrics when comparing different investments because in incorporates the length of hold to achieve the desired return.

@Greg Scully Thats a great suggestion!

Instantly when i read that I'm thinking add market analysis to that email chain which is it's one separate schedule based on when people sign up, and maybe use the articles as a separate newsletter type feature for potential and active investors to keep everyone up to date and separate from our current newsletter for anyone and everyone. 

Thanks for the input!

@Stefanie M. good to meet a fellow NYer, I'm currently in Williamsburg!

I definitely prefer MF for 3 main reasons.

1. you are not reliant on one sole tenant and your risk gets spread over the number of units you have.

2. Your value is not derived as much from what other properties nearby are selling for like SFH, but much more on how much income you generate and how well you can operate the property. There is still a bit of how much other buildings sold for, but not nearly as much as in SFH

3. Residential loans for SFH and small multi pile on top of each other and can be limited because of your debt tto income ratio. Commercial loans for usually 5+ unit buildings still have certain net worth and liquidity requirements, but it doesn't necessarily matter nearly as much if you have 1 loan or 1000 loans (extreme number), because the financials of the building support the loan amounts way more than residential.

However, I definitely do think there are tons of arguments in favor of going with SFH, I'm just a bit biased. If you ever want to hop on a call or meetup and talk more about doing it out of state, we're almost exclusively out of state.

Hope this helped!

Hey guys, we're in the process of revamping some of our email marketing processes and one of the ones we're focusing on is for leads that fill out our investor questionnaire on our website.

Right now we are compiling a list of emails to send out every 2 weeks or so with information we think would be valuable to the potential investor that would help educate them on not only how we conduct our business, but the business in general. I feel that this will lead to a more educated investor, which will not only benefit them, but also has the benefit of speeding up the process of getting commitments when we do have an active deal for people to invest in. 

So far the emails we have come up with are:

1. intro email to set up an intro call/meeting

2. follow up email with a link to our case study from a completed deal

3. email with an example of one of our investor updates we send quarterly

4. email with an example of the legal docs we have used in the past

5. email with an example of one of our past investor books we put together for a new deal

6. email with our top 5 books we recommend to everyone

Would love to everyone's feedback not only on the listed emails, but other potential emails to send, and what they think about the idea of providing the resources to help educate potential investors

Thank you so much for any feedback in advance!

@Marielva Estevez Hey fellow NYer and out-of state investor here. I currently rent an apartment in Williamsburg and I'm invested in the stock market, equity funds, bonds, flips, and our own multifamily investments. The way I look at it, is the difference in rent vs my mortgage potential would be the principal pay-down I would be getting on my loan and I personally think all my investments are going to provide a much higher ROI than paying down the loan. I plan to continue to rent for several years because of this reason. However, purchasing a home is obviously attractive for people who want to save money and build equity and may not have the financial sophistication to feel comfortable doing otherwise. I don't think one way is better than the other and is all based upon personal choices and preferences.

@Ioannis Babatsikos hey great to meet another Long Islander! I grew up in Smithtown and went to Hofstra but I live in Brooklyn now and work in Jericho!

We almost exclusively invest out of state and in the southeast and midwest, so I'd be happy to help with some questions or concerns you have.

We also host a free monthly meetup in Westbury if it's something you're interested in. We're gonna talk about how to pick a target market in the next one on Apr 17th. I put the link below, but feel free to also shoot me a PM if you want.

http://meetu.ps/e/GyBrB/zNqhq/f

To answer your questions

1. Possible but very hard in my opinion. I would encourage you to factor a manager into your cost and only buy deals that make sense with it. Way less stressful and you won't have to be the one getting the call at 2 AM when the pipe burst or the toilets overflowing lol!

2. Picking a market, you have to understand what your goals are. How much do you trust someone else to run it, are you looking for cash flow or appreciation, how expensive is it to get to the property, how long does it take to get there, is it place you won't mind going if **** hits the fan, etc.

3. Again it's all about what you want, buying a distressed property for an investment is tough, because an end user is typically willing to pay more than you or a contractor that can do the work themselves or for cost can afford to pay more than you. But definitely not a bad option if you can make it work

I always recommend listening to podcasts during commute, gym, walks, lunch etc because you can multi task and also I struggle to read business books but love listening to discussions on business topics.