All Forum Posts by: Dennis Tierney

Seems like an unrealisitcally low expense/income ratio, especially with owner paying the heat. Do you have actual financials for the last 3 yrs? I would demand them and maybe the tax filings on the property to get a real world view of the finances. With his demands on quick sale/financing with a lot of upfront $ you have leverage to be sure you get it at a realistic price. If you can come to a realistic price and buy it you could have a good upside by doing a RUBS with the utilities.

@Victor A. I have done this but honestly am not sure how much protection it actually gives. The issue is the SDIRA still owns it all and is the ultimate recourse for the litigant. The way I have it set up is that each apartment has it's own LLC but the sole owner of the LLC is the LLC that is owned by the SDIRA. That way there is only one tax ID# that is needed. Hope this helps.

@Richard Decoste If you don't know how to determine the value of a property you will be fleeced. Educate yourself before you get into making offers on real estate. There are lots of resources on this website and lots of books to read before you jump into the deep end on multifamily.

@chris Welcome to BP! You may want to consider joining in the Metropolitan Omaha Property Owners' ***. (MOPOA) We have monthly meetings the second Monday evening every month except for the summer and a breakfast meeting the second Saturday every month. The next meeting is this coming Monday. Check out the website for more info.

@Jason I knew the property wasn't worth anythning close to the first appraisal but the problem comes when the seller and his agent uses a falacious appraisal to justify their price to an inexperienced buyer. This is the second property in a row I've run into this. The one we purchased in 2012 was appraised 6 months before we bought at $2.5 mil but it wasn't worth that and we finally convinced the buyer to sell at $2.25 mil. after much "education" of the seller. It makes a buyer's job harder to have to overcome these unrealistic appraisals.

@christopher You missed the point. This was the same guy giving an appraisal on the same property that is in the same condition as 13 months previously in a market that if anything the prices are higher than 13 months ago. There is no way the value should be 11% less if this is supposed to be an accurate estimate of the value of the property. This is a guy that supposedly knows the local multifamily market.

Generally yes I'd say they are overpriced, but, that shouldn't prevent you from making offers. The last 2 deals I've done were overpriced and required a fair amount of "education" of the seller and his agent but eventually both came down to a price that finally made sense, one after 5-6 months and the other after 18 months. The worst they can say is no. You just have to be prepared to walk away if they persist in being unreasonable. There's always another deal.

@Bill Gulley I understand what you're saying but inflation is nil, it's the same owner so the management has not changed (same owner/manager since 2006), the market competition is the same. The only difference is who's paying for the appraisal. The company that I use to manage and manages many properties in the market agrees with me that the market has not shifted 11% in one year.

Has anyone else found multi-family appraisals in your area to be essentially worthless? I know the banks require them but I have found them to be wholly lacking in credibility. We have under contract a 48 unit that in Oct of '12 was appraised at $1.9mil. I knew the assumptions were faulty and it wasn't worth that and we have it under contract for $1.685 mil. Now another appraisal by the same guy comes in at $1.7mil. I know the local market hasn't dropped by 11% and the property is functioning at the same level as in 2012. It seems to me they play to their audience and this time since he knew the purchase price he altered it to match the price. That doesn't seem show any integrity.

I agree with what most have said that his books have been life altering for a lot of people, many on BP have attested to that and I am one of them. The truths in the books are in the philosophy of business and personal finance decisions and not in the facts of whether there is a real Rich Dad person. The reality of a Rich Dad person is irrelevant and focusing on that means you've missed the point of the books and not learned the needed lessons of how to think about approaching your finances and investing decisions.