All Forum Posts by: Neil Schoepp

We will continue our exclusive 13 steps to owning your first property. Last week we covered getting your finances in order and the different types of properties. This week we continue with different strategies and building your team. We will also be discussing staying focus and setting goals.

I look forward to hearing what your biggest win was this past month.

See 'Ya there!

We meet the first Tuesday of every month. 

Short answer:

=>10,7 to 8,=<5

Winded one:

There is a lot to consider when talking about cap rates. First the cap rate on a property is only created once your offer is accepted. With that said you want the highest cap rate possible the seller wants the lowest. 

Cap rates change in every market and even sub markets. So the first thing to know is what the "average" cap rate is. Be careful though. I'm from a small area and cap rates in town or what one would consider the business district is 2 points lower than just outside of town. Still the same zip code but slightly outside the "place to be".

With that being said it really comes down to what you are willing to accept as your return on the capital you deployed. 

I am in the wealth creation portion of my life's plan so I am looking for cap rates well above what I will pay in interest on my debt. Having a nice spread between your return and your interest rate also serves as "insurance" when the interest rates go up. Most commercial loans are adjustable over a certain period of time. 

When I analyze deals I pay much more attention to my cash flow number.  Cash is king and when the market falls out from under you your cash flow is what will get you through.

I am looking at a deal for 9 of 10 townhouse plus the land in a complex.

Background:

The seller built the complex. They formed the condo association but not an HOA. They were going to sell off each townhouse. After selling one off they decided to keep the other 9 and rent them out. The seller owns and is selling 9 of the 10 townhouse and all the land.

I have never dealt with townhouse's or condo's before and would like to gather as much info on them as possible.

The following questions relate just to the condo's. Not to deals in general.

1. What documents should I be asking for? 

2. There must be some type of agreement between the seller (whom owns the condo complex) and the lone townhouse owner. What is it called?

3.  My plan was to buy it cash then finance it and pull my money out to buy something else.

 When I met with the broker she said traditional financing would not work due to it being condo's. I spoke with an investor and he said I wouldn't have a problem, though did not go into detail at the time. It was more of a quick question to see where I stood and what options I have.

Anyone know how financing would work?

4. I've done MF, MHP, and SFR before, but never Condos. Any other advice you can offer specific to condos regardless of how basic it may be would be very welcome.

Thanks for the help.

You are going to need a partner. That could be family, friends or from networking and finding a business partner. 

Real estate meetups and REIA's are good places to start.

Just remember to move SLOWLY when meeting potential partners at meetups. Learn about them, visit with them VET them. Get to know them before jumping in bed with them. 

Lay out the numbers in an easy to understand format, so those that know nothing of real estate can understand it. 

If you like you can post those numbers here to get a second set of eyes on it, just to make sure nothing was overlooked.

My favorite way is to network. That simply means talking with people about what you do and asking for help (that ask is "If you ever hear of something that is coming or may come up for sale let me know". Let them know that you are actively looking for properties to buy. Each person you talk with becomes a lead generation tool for you. I always approach it from a laid back position. This is who I am this is what I do and if I can ever help you out I will. That help by the way is in anything. For example if I am at church and talking with someone that I am kinda friends with and they make a passing comment about they are moving I ask if they need a hand packing up, or loading boxes. I genuinely look to help those around me. I am looking to build a network of friends not just use them for leads. The leads portion takes care of itself. I use this same approach with bankers, brokers, lenders, inspectors, mailmen, cashiers at the store, gas jockeys, the list just keeps going on. By the way real estate is NEVER the first thing that comes up, it will eventually come up naturally. Most recently I met with a real estate agent about a property I saw on the MLS. I met with her for the better part of an hour and spent just 10 mins discussing the deal. The rest was about her daughter, husband, how she got into real estate. That's actually the part of doing deals I like the most. Meeting people and seeing what makes them tick. I'm most likely not going to get that deal, but the win is I've made another friend. This does take time, but when done with genuine appreciation for them it will last a lifetime.

Welcome aboard @Dimitri Jean-pierre

You have landed in a great place to explore and learn. Spend the next month just exploring this site. Read a post then do a search for those topics that either interest you or you don't understand. You will soon become comfortable with the lingo. 

A great place to start is with the podcast  https://www.biggerpockets.com/podcast

Another great source is doing a search here and on Meetup.com for real estate meet ups. Just be aware that some will truly look to educated you and others will want to just sell you things. Attend those that educate. Run from the others.

Lastly never be afraid to ask us questions. That's why we are all gathered here.

@Kumar Tummalapalli that's a pretty good idea. I do not have a list of episodes. I do find lots of value in the following podcast

Biggerpockets 

Jake and Gino

Rod Khleif

Kevin Bupp

It would be interesting to see a list of if you want to know about this then this is THE single best episode. I just browse through each one of their podcast and look for what I am researching at the time. 

I'm not sure if there is a list out there somewhere but how about starting one right here. 

Identifying Markets  Kevin Bupp Mobile Home Park Podcast Episode 3

Who is going to step up and add another?

@Mike Dorneman I'm from the true NEPA. I'm up in Milford (Pike County) in the very upper north-east where NY, PA and Jersey meet. If your ever up this way or need some info I'd be glad to meet with you just give me shout.

@Francesco G. Unfortunately I do not have an answer for you, but rather a question. What is this green card you are talking about? I border Montague, NJ (Sussex County) and have some interest in buying properties in Newton, NJ. Any chance you could give a brief description or lead me in the best place to get more info.

Yes your county would be able to compile the list for you. Some charge a small fee some will do it for free. Some do it right there some use a third party. You would visit the assessor's office.

If you pass a property while walking or driving around your interested in then you can see if your county has an online GIS. Every county in the country does it differently. I am in Pike County, PA. They list both the physical address and a mailing address right online. So it's easy here.

Try doing a search for {your county} GIS. So for me it would be Pike County Gis. If that doesn't work then try {your county } tax maps. It all comes from the county tax office.

It's also a good idea to visit the tax assessor's office. I have had much success with a quick visit and two or three questions. Then follow up with a quick thank you card address to the person you spoke with.