All Forum Posts by: Scott Skinger

thanks for sharing...great to know and congrats!

Congrats @Calvin Lipscomb keep up the good work and let me know if you need any assistance on anything.

@John Warren knows the Berwyn market backwards and forwards, he can steer you in the right direction.

Exit Strategy is always relevant because you just don't know when you might need to exit. Life circumstances change, markets change and balloon payments come due.

Here are SOME of the examples that you need to consider:

-You mentioned other investors. Even if you're providing good returns, it is very common that investors want their money back after a certain amount of time (5-10 years is common). I certainly would want the option. I don't want to feel like you have access to my $ indefinitely. I might want to invest it in the stock market, another REI or pay for my daughter's wedding.

-A lot of commercial loans have a 5 year balloon payment, you need to sell or refi. What if the market has soured a bit and interest rates have gone up? Your appraisal may not hit the mark and the new loan might mean negative cash flow? You need to underwrite and plan for this.

-Even if (as you describe) you get investors with a long term mindset and you get long term (10 year) agency debt, it would be very prudent to underwrite an exit at 10 years and make sure that you have options. 10 years is a long time and things change. It is always nice to have options and you want to feel like you can sell your building in a position of strength if you need to.

Good Luck!

Go to Loopnet or Crexi, underwrite deals and call brokers. Sometimes your timing is right when a seller needs to drop a price and you might get other deals from the broker. Form relationships. Hustle.

Talk to REI friendly brokerage houses like 2nd City, get knowledge and potentially leads from them. @Brie Schmidt @John Warren and others from 2nd City can help you out and have their specialty areas. Form relationships. Hustle.

Talk to other Chicago MF investors like myself, go to meetups like @John Casmon had last night and talk to people about their deals. You will find deals that don't work for others (distressed, location, too big, too small, etc.). Form relationships. Hustle.

There's a common theme here, but a lot of potential REI aren't willing to do the work. Forming relationships and hustling are essential in a tight market. Happy to help.

Good Luck.

Typical is to have the building under contract and past physical DD, just to avoid the cost/time of setting up the LLC and operating agreement.

Two thoughts on timing. One, actual formation or setting up a LLC (paperwork) is quick, can happen within 24 hours. Two, the planning around it can take a little time and something to add to your checklist of things to do. Everybody's situation/goals are different, so have a brief conversation with an attorney to make sure that your needs are addressed.

A third thought, "now", as you described your situation above, is too early. You don't need to think about the LLC until you have a LOI accepted on a building and your negotiating terms of the PSA. It is a checklist item, not something to strategize around.

Put yourself out there and be more social...be human. Here, networking events, conferences, etc. Here are some specific action items:

-build out your profile on BP, I want to see a picture of you, know what you do and what your goals are

-be helpful on BP, start trying to answer/participate in posts where you have some value

-start reaching out to people on BP specifically, with small, specific asks

-go to a few networking events every month and plan on talking to many people...it takes 5 + bad conversations to find 1 good one

-go to 2-3 conferences per year and be very purposeful there in your intentions, don't just go to sessions and stay quiet, be intereactive

I probably should have started with this, but what is your goal in connecting with these people? Are you looking to invest? Learn? Investing will be easy, they will find you and you can also ask on BP for respected/quality sponsors.

Good Luck. 

@Chris Weichselbaum I've met with http://www.mpghousing.com/ before and they are probably a perfect fit for your location/size. You can also contact WPD, http://wpdmanagement.com but I'm not sure they will take on a 6 unit.

I'm investing in buildings in Woodlawn and South Shore currently and considering Park Manor. Hit me up if you want to compare notes.

If you don't know www.heyjackass.com, helpful website for homocide rates in Chicago neighborhoods, although very general. 

Start doing a lot of reading/listening:

Podcasts - Jake & Gino, Todd Dexheimer, Michael Blank, Joe Fairless

https://jakeandgino.com/buying-your-first-multifamily/ 

Books - search "buying apartment buildings" on Amazon

Web:

https://jakeandgino.com/how-to-buy-your-first-twenty-five-unit-apartment-complex/

Read info on BP...there's a lot if you just go back through these threads

@Tom Edwards Depends on what size buildings you're talking about. If you're talking about dups/tris, for example, having more than one broker searching MLS listings will be redundant and perhaps frustrating for the agent.

On larger deals, say 10+ units for example, the seller will typically list their building with a specific broker, not on the MLS. That broker will prepare the OM and bring that building to their known buyers and/or email list. So if you only have a relationship with "Broker A" you will never even know about the building that "Broker B" has a listing for.

You need to have enough broker relationships where you have an adequate pipeline of deal flow, so probably more than 1 broker and less than "every broker in the market". As an example, I'm involved in 4 different projects right now with 3 different brokers. All of these are dual agency deals, one broker representing the seller and the buyer.

Good Luck!