All Forum Posts by: David Monroe

@Vin Yan There are a few tools you can use to look for multifamily rent comps, none are cheap. Depending on the size of properties will depend on the tool.

Costar is the #1 tool for rent comps in my opinion, because they will have the smaller properties. They also own apartments.com.

Yardi Matrix is another provider of rent comps but is really only effective over 100 units in most markets.

Axiometrics is another tool that only has the data for the properties wit large property management companies. So they don't cover a large database of properties.

REIS Reports is another tool widely used but I don't find their data to be very accurate.

If you don't want to spend the money on tools then build a relationship with a multifamily broker in your market. They should have access to at least one of these tools. 

You can also join the local National Apartment Association chapter and build relationships with the local property managers for the same information. You can't join the NAA directly, you have to go through the local chapter. Go to naahq.org to find the local chapter. It's only a couple of hundred bucks a year and well with the relationships.

@Jose Ortega We always focus on the exterior first. Renting a multifamily apartment is really no different than selling a house, it must have curb appeal. 

Here's my point, if you drive on the property and the parking lot has pot holes and you can't see the striping, weeds are overgrowing the sign, the exterior of the building has been painted in 15 years or, if brick, has never been power washed, what's going to be your first impression as you drive on the property, if you even make the turn.

If you do come on the property everything you look at, even if the interior has been completely renovated, you're going to find fault and continue to look for what else is wrong.

That said, as you're renovating the exterior the tenants will actually start to get excited. The deadbeats will leave because they know a rent increase is coming soon, and the existing tenants will be begging for renovations to their units.

We usually will allow a tenant to move into a newly renovated unit, at the new rental rate, and transfer their deposit, if they didn't have a deposit, we would require one before allowing them to move.

This frees up another unit to renovate. You have to do your interior renovations as tenants move, or leases expire and you give the tenant notice your not going to renew their lease.

In really bad properties, you may need to kick out a building at time, which can be done with notice as long as your doing it for health and safety reasons, or the entire property. 

If you have section 8 or 42 tenants you will need to check with the local housing authority to see how to handle them, or face the consequences of kicking one out.

@Mark Skaff I knew from the start I wanted to invest in multifamily properties and getting a license and learning by doing was my steps to getting where I want to go. I'm not there yet, but i'm on my way.

@Mark Skaff Here are the basic tools and resources you need to get you started:

Listing Platforms:

• Realnex.com - I use
• Costar.com - I use
• Catalyst.com - I use
• Brevitas,com - I use
• Crexi.com - I use
• Loopnet.com - I do not use

CRM, customer relationship management options, you only need one:

• Realnex - I use
• Clientlook
• Apto - Salesforce
• Digsy

Marketing package creator, you only need one:

• Buildout - I use
• Realnex - I use
• Microsoft Publisher
• Adobe InDesign

Market and financial analysis - advanced tool:

• STBD - Site-To-Do-Business (Demographic and Psychographic) - I use
• Costar.com - Rent and sold comp and market analysis data - I use
• The Analyst Pro - Online Financial Analysis tool
• HP10bii calculator
• Fuel.com - financial analysis tool
• RPR Commercial - I use

Not all these are mandatory and there are many more that compete with the above, these are ones I've used in the past or currently using now.

The key is that you have a listing platform outside the MLS, a CRM to track you contacts, clients, properties and deals, a way to create a stunning marketing package, and market and financial analysis tools.

@Shane Craig I have my company LLC, taxed as an S-Corp, that originally puts the deals under contract, then assigns the contract to the LLC we create to title of the property before closing. It makes money from acquisition and asset management fees, which is active income, and pays me and my partner a salary. This LLC is the managing member of all our property LLCs.

@Shane Craig I create the LLC of my company in the state I live in and a foreign LLC in the state the property is located that will take title to the property.

In other words, my my investment company is called A&M Equity Group, LLC, registered in the state of Alabama, and we bought a property in Texas that we raised money to purchase. We registered the property as Volare' at Longview, LLC in Texas as a foreign entity, since the sponsor lives out of state.

A&M Equity Group, LLC is the managing member of Volare' at Longview, LLC and the investors are limited members.

I hope that wasn't too confusing.

@Steven Eitreim If you put it that way... 

@Mark Skaff One more thing, you want to be at a commercial firm. It's pointless to try and sell commercial real estate from a residential firm. Commercial owners, buyers, and investors won't take you seriously and think you're a resimercial agent.

@Mark Skaff If your goals are to invest in commercial properties then you should go commercial. The only downside to doing commercial, in my opinion, is the length of the transaction cycle, can be from 3 to 9 months. Be prepared to have fewer closings than a residential agent would be used to but the commissions are higher to make up or it, if you're targeting higher priced assets.

The experience you will get in learning the transaction process, the due diligence required, and the financing strategies to get the deal closed will be better than any training from a Guru because you're in the transaction and learning it first hand.

As far as tools, yes they're more expensive in the commercial world, it's just a cost of doing business, get's you larger to deals to make up for the expense, and lowers your overall tax bill at the end of the year. I pay $2000 a month for CoStar to have the National database and could not be successful without it. There's no better tool on the market for multifamily properties. You can get a local subscription for as low as $250 a month, I believe.

@Ron Fiscus Fire him! The listing agreement should have a clause allowing you to let him go with notice.

You should be getting communication from him at least once a week, or whatever he promised in the listing presentation, good bad or indifferent. If he's not communicating, he's not working on the property.

Start interviewing new brokers right away. Disclose to them that you're firing the current broker and will be released from the listing agreement in ?? days. Do not sign a new listing agreement until the one you're under is void.

Good luck and let me know if you need help in the process with letting him go or finding a new broker, I know allot of great brokers in the multifamily space.