All Forum Posts by: Greg Kasmer

Quote from @Veronica Giggers:

Hello BP family. We are considering investing in a MF, it is 12 units with over 90% of the property empty, and needs renovations to all the units. I know there are variables to ever situation. But, approximately how long does it take to turn a MF property over, and reposition it for refinancing? I have done some calculations on rehab cost, but not sure how long it will take to start getting cash flow.

 Veronica - I think it would be beneficial to share this project with a potential contractor or two and get their thoughts on the renovation timeline. Different theories on how to execute (renovate all at once, renovate 4,5,6 at a time, etc..) so you'll want to get a sense for their renovation timeline. Of course, I would add a month or two to their timeline and then chart it out in excel to understand when each unit might be available to rent once stabilized. (It's probably reasonable to believe that your first units wouldn't be "rentable" until 6-9 months after closing). Below that I would then guesstimate your "cash burn" during each month to make sure you have renovation funding aligned with your project. Lastly, you can then model your potential future cash inflows based on the first month rent estimates as units come on board. Overall, I think you'll want to clearly understand how much cash is coming in and going out each month to make sure you can support the project over the entirety of the project. Good Luck!

Quote from @Wilson Pereira De Oliveira:

What you guys think about these listing, does it has potential or not?

https://www.realtor.com/reales...

https://www.realtor.com/reales...

https://www.realtor.com/reales...

https://www.realtor.com/reales...

Anybody willing to team up in any deal??

@Wilson Periera De Oliveira - Looks like these are links to realtor.com listings. I would suggest you run each of these properties through a calculator/analysis to quantify the cash flow potential after acquisition and renovation. It will demonstrate you've "done your homework" and can have a more specific conversation with other potentially interested partners. You can talk numbers and see if your vision for the property (and potential returns) align. Good Luck!

Tyler - I would have the realtor give you some comps and look for those duplexes that have "average finishes" versus those that have "high level finishes" to kitchen, baths, etc... I think an appraiser willy likely appraise your one unit at one level and the other at the other level. Personally, I try and completely finish the rehab before securing long term financing to maximize the money you can pull out at refinance, so I would suggest thinking about how you can garner funds to complex the rehab in the second unit. (i.e. Private money, HELOC, etc...) I'm sure that finishing the second unit would also help with getting increased rent from that unit. As always, hard to say without exact numbers, but my tipping point is about 20% ROI, so if I can put in 10k into a unit and get an additional 2k in rent for the year I would (personally) do it. Good Luck!

Michael - I agree with Erik. I think most local banks/credit unions have tightened their standards a bit, so I would anticipate a 65-75% LTV from my regional banks with a multifamily property. You never know so it's always worth to call, but wouldn't be surprised if many of them fall within that range. I had a 22 building under LOI assuming 75% LTV, but then I backed out becuase financing was going to be 65-70%. Good Luck!

Chris - I would definitely attend some local REIA meetings in your area and see who the investors are - typically there is a networking session and people are happy to connect with others. I'm also in PA, so if you're targeting properties in PA let me know! Good Luck!

Zac - I would suggest searching the BP podcasts for any of the following: "Multifamily"  or "Multifamily/Apartment Underwriting" and you should get a few options. There are also books written on the topic from Robert Beardsley, Brian Burke, two BP books:  Multifamily Millionaire and Real Estate By the Numbers. Good Luck!

Quote from @Thomas Key:

I am currently house hacking and renting by the room and I am looking for ways to add value to the home. I've done things like upgrade electrical amp but was wondering does small ticket items like adding ceiling fans help for when I want to refinance on the property for the future? Any suggestions would be greatly appreciated. Cheers!

 Thomas - I think the feedback you received is dependent upon what "value" you are trying to improve. If it's the value of the home from a valuation/appraiser standpoint they'll focus on square footage, finishes, updates to bathrooms/kitchens, etc... and compare those to recent comps in the area. However, if you're looking to add value to garner more income from renting the property you'll look towards adding items that tenants will value (i.e. ceiling fans, landscaping, etc...) - so, either way "value" can be created, but just depends on the goal of the value. Good Luck!

Quote from @Raluca Ciobanu:

I have a rental property that I purchased 2 years ago when interest rates were at 3%. I have some good equity that would love to take out and buy another property, but how do you refi with todays interest rates so high? Thank you! 

Raluca - I think your decision comes down to alternatives you may/may not have for the capital for your next purchase. Ideally, I would agree that a HELOC is the way to tap into equity, but it's harder to obtain on an investment property. Refinancing might still be an option if you are confident that the money you pull out will be earning a higher rate of return than your new interest rate on the loan. For example, would the overall cash flow of your old property (with higher interest rate) plus your "new" property be more or less than the cash flow from your existing property (with the lower interest rate)? Basically, if you refinance at 7-8%, but you, in turn, use that money to generate 10+% return that would still be a benefit overall. Plus, you'll have the benefit of appreciation and depreciation of the new property. As an alternative, you can also use private money (i.e. loan) to purchase your next property if you intend to BRRRR it in the future and therefore pay back the private loan. Good Luck!

@Kristi Miller - Not sure how many local banks/CU you called/inquired with, but I typically get rates from 3-4 to get a sense of what might be offered in the aggregate. Some of banks I spoke to recently were 7-7.5% so the 8.25% you were quoted sounds a bit high to me. I think it's worth it to call a few more, or reach out to a broker. I also know the larger brokers (CBRE, etc..) do have connections with local banks that can help. Good Luck!

Gloriz - I've invested in three companies with self directed IRA and put together a quick "info guide" on some of the nuts and bolts on how to execute the transfer. Let me know if you want a copy. Send me your email! Thanks!