All Forum Posts by: Account Closed

Here is one example.  You own 1,000 units spread across four 250-unit apartment complexes in Phoenix, AZ.  You are a multi-millionaire!! Your rents are covering your mortgages and you are living a good life.  

Then, the market crashes and rents go down 80% due to some varying factors...none of which you really had control over.  You lose tenants and your rental income goes down dramatically and you can no longer pay the debt on your mortgages without dipping into your savings.  But, your mortgages are each $40,000 per month so you run out of savings after 4 months.  Then you lose the properties because the market hasn't recovered and you have run out of money to keep feeding them.

This is one example.  I'm happy to give you a hundred another scenarios.

PS. @Ben Leybovich I agree - scary when people ask how can you lose!

The projected expenses are WAY WAY too low.  This is not a good deal.

Northrup and Field are not A areas.  Linden Hills, Fulton, Kenwood and Lowry Hill are the A areas in South Minneapolis.

@Tzvi Balsam valuing potential equity over potential cash flow doesn't mean someone doesn't care about returns.  It is a different kind of expected return.

It seems pretty disingenuous to me that you would be trying to sell someone a bad deal on purpose. This is a very, very small industry and your reputation is of utmost importance if you ever want to do more than one deal.  I'd tread carefully if I was you.

@Joe Fairless you are way past me, brother!  

@Joe Fairless congrats on your continued success!  Where did you buy the 320?

@Brian Story Multifamily is valued completed different than Single Family.  You might want to read Steve Berges or Eugene Volluci's books before getting too deep.  They are a quick read and a good primer if you are just beginning in Multifamily.

@Matthew Rembish CBRE & HFF are the names of major national commercial brokerage firms.  

@Matthew Rembish I'd look up Marcus & Millichap, CBRE, HFF and Berkadia and start there.  Sign up to be on their property lists and start analyzing deals.  I'd go tour every single deal in your area that comes on the market, underwrite them and discuss the deal with the broker before and after you've underwritten.  This will help show them you are serious.  It takes time to build up these relationships but they are gold and well worth any time/effort.