All Forum Posts by: Darwin Crawford

@Thomas S. can get them turn-key installed for, say $1500, make the tenant pay for it, and get a unit with 3-5 year warranty (pretty easy), he gets a building upgrade, paid for, and then making him extra cash for the next couple years.  

It's all about the dollars in my book, and if you can get more out of each property, all the better. 

Slick find!

I've messed with the Kill-A-Watt with some submetering situations, but that's a way cooler find.  Any word on longevity/firmware/etc?

Look at installing mini-split systems.  They are wonderful, efficient, QUIET and far less expensive.  I've been around them many times overseas in the last 5 years and they are a perfect fit for this problem.  There is someone around you installing them already, I guarantee it. 

Might make this problem not so big after all.

@Don Konipol - the move I want to make is to buy these at class C/D pricing, and turn them to class B.  The first few buildings will be uphill, but as the neighborhood turns (its not very big) they will get easier, and the rents go up.  There is one investor who made the first move in this market, and has done a beautiful job.  He has also had very good luck renting them for full price, and quickly.  

The local beat cops, whom I've met a few of, also would be very supportive of anyone going in to clean the place up.  

There are class B properties within 1/2 mile, and class A within 1 mile.  

@Xu Som - one trick I have used is rather than scraping all that junk up, go get the cheapest thin Luan plywood you can find and just cover it.  Nail it off, then carpet or laminate right over it.  The stuff is like 6mm thick, and no one can tell the difference when it's done.  

One time with flooring stripper and a scraper and you'll quickly see the wisdom in $9 sheets of thin plywood.  

the adhesive has most likely worked itself down into the wood grain of the subfloor, and will be next to impossible to remove all the way.  

@Don Konipol - correct, I live on the south side of Old town, and spend an inordinate amount of time cruising the streets on my motorcycle with a notepad. I think your assessment is spot-on, and scottsdale is a tough one to make work with lower-end stuff, and especially SFR. I've had great luck with one condo complex in particular, getting 10+ rates with Airbnb and travel-nurse rentals. You just have to hustle for high rents to pay for the dirt, and like you, I've been out-bid more than a few times and just wondered how that person makes the price work.

I have a property down by ASU, and yes, college kids are a different beast.  I market mine heavily towards nerdy grad-student types and have had far better luck that way.  

One thought that immediately comes to mind after reading your post is to just sit tight and keep putting in offers at the 10x rent price point. If one sticks, great, if not, keep plugging. My only drawback to that is the laughable returns of having cash in a savings account versus a REI, as I don't doubt it will be a long-ish search.

The particular block I want in on is ripe for forced appreciation when cleaned out.  The land is simply too close to old town and other attractions to stay the way it is forever, and once turned around, will be gold.  The nut I'm trying to crack in the meantime is keeping deals solvent until the land turns, and making some money in the meantime.  Being unable to get 5% money means I need to either get lucky, get bankable, or catch a heck of a deal to pay the hard-money guys.  

@Brad Freeman - I really, really like that line about a houseful of equity.  Might have to throw that one up on the whiteboard in my office.  Good "mid-day-coffee-break staring material".  I'm going to polish up on some buy/rehab/hold cost modeling, to see if there isn't a deal to be made cleaning one out and selling it to another buy/hold guy for some profit.  With a little luck, a few of those will net me the cash i need to buy one for myself.  

In terms of getting a first non-family investor, do either/any of you have an opinion of me showing the books of my current business to potential investors?  Good idea or giving away the family jewels?  I'm pretty open about what I do in order to make good returns, its not rocket science, just disciplined hard work and relentless organization.  Oh, and a very very low tolerance for any tenant BS.  

@Brad Freeman - could not agree more with your last sentence.  I didn't approach this place with the quick exit strategy, but in theory, a reno+renters will force a pretty decent appreciation, so it could be done for sure.  

I have grown to like rental income, but it is certainly not without it's drawbacks.  Steady, yes, but the big paydays of my old business are a fond memory at best.  

I'm getting the message from you that I need to find the deal before i attempt to raise capital....yes? In theory its doable, but the market is warm enough right now that they go pretty quick.  Guess I have to just keep throwing **** at the wall until something sticks.  

One more question - can you define "awhile"?  I never know what kind of track record anyone wants to see.  

@Brad Freeman - that is, for lack of a better word...amazing.  Would I be asking too much if I was openly curious about how you got started doing that?  

How would you do the profit on a buy/hold deal? Just 50/50 on NOI? Was it hard to find these people, and what type of guarantees/rates/LTV do you shoot for?

Hey there,

So I'm reading everything I can in this forum, (very very helpful btw) and have come to the conclusion that I would like to try and put together a close-to-home apartment deal on some smaller (4-16 unit) multifamily buildings in my local area.  

I have a personal conviction at the moment about local investing, which is based on some experience managing my small portfolio of SFR's and condos.

Some background - I am a former construction/millwork/welder dude, have run a couple of my own businesses, and got into landlording about 14 months ago.  bankrolled by a family member, have 5 units in 4 properties owned, 2 mortgages, and a track record of profitability.  I am currently personally un-bankable, so deals have to come from cash, partners, or their own financial merits. 

Coming from the construction world, there isn't much that I can't do on the 16 unit and under buildings.  I still own a lot of my equipment, and have graduated to "finger pointer/organizer/budget manager/a-kicker".  Believe it or not, I actually enjoy the day to day running of places, working with my hands and head and iPhone, and making properties better.  Like I tell all my subs: "I can do your job and keep the money if you screw it up, so don't make me prove it"

My duplex is in escrow, and will net me about $75K in cash, which is all I am going to have to bring to the table, along with my skill-set, 10+ years of knowledge, and track record (albeit a short one) of 10+ cap rates in areas where everyone else gets 6.  

I am focusing on an area of scottsdale that I would describe as the proverbial pimple on the proverbial backside of my part of town. Its full of 60's-era block multifamily units, and surrounded by C&B grade apartments, starter condos, and some SFR's. Current properties, except for 2, are run-down, poorly-maintained, disgusting, and have everything from working class immigrant families to meth-heads. If you take the part of town I'm in, and consider it a "block", this is definitely the worst house on the nice block, so to speak.

The drawback of my area is that dirt is expensive, and seeing 10+ cap rates based on price isn't going to happen.  This is a 6 or 7 play at best, with appreciation as the icing on the cake.  It won't happen overnight.  

I would like to either raise money, or take on some partners, and I'm asking (pleading just sounded bad..) for some ideas on deal structure.  I have cruised the area in question daily for the past year, and am about to start direct calling landlords to see who wants to sell.  I know, without a shadow of a doubt, they have headaches.  

Based on some hypothetical math, I think that buy/reno budget on these places should be about $75k/door (purchase price + construction) and will rent for $500/door per month.  As the neighborhood turns, rents can and will go up.  So call it a cap-rate-turned-land play.  

I'd like to be paid for finding, managing, etc, and don't feel that it is an unreasonable attitude.  

Anyone ever tried this?  Got a good success or horror story ending?  Suggestions?  I am well aware that the first one will be the hardest, and don't mind the hustle.  

I put up shaded parking spaces in front of my duplex (steel girders and UV cloth shade sails) and they were a HIT!  Shade in the desert is a very easy sale..

I used to weld for a living so got it done cheap, still have my truck and engine-drive welder.