All Forum Posts by: Jeffrey Donis

Hey Spencer!

We are in NC- most of our markets- Raleigh/Durham, Greensboro,Winston-Salem, etc are all experiencing the same thing. We continue underwriting deals and since it is harder to find one that pencils out we underwrite more than usual! 

 Thank you! 

Likewise- best of luck!

Best of luck!! 

Here are some things we look we look for in new markets- I made a post about something similar last week-

• 1. Population over 200,000
• 2. Long-term population growth of at least 50% of the national average (preferably more)
• 3. Diverse economy
• 4. Labor participation rate at or above national average
• 5. High relative cap rates
• 6. Pro-business, pro-landlord climate
• 7. Limited risk from climate change
• 8. Close enough to home for you to oversee easily (one-day round-trip preferred)
• 9. “Anchor” is a bonus – not necessary, but great to have. Avoid bad anchors.
• These are some that @Rick Martin added to the list-
• 10. Population growth trend from 2010 to present.
• 11. Median HH income growth from 2010, and 2016 to present. So 5 to 10 year trends.
• 12. Job growth (this will be weaker this year in all markets due to COVID, so it should be on a bell shaped curve)
• 13. Some swear by a median HH income range from $40 to $60k, but it depends on the surround affordability of homes. If homes are affordable for your tenant base, that is not good.
• 14. Affordability. Can the tenant base afford your rent? ex: median income $40k med income ÷ 12 months = $3,333 ÷ 1/3 (affordability ration- some will 1/4 to be conservative) =$1,111. That is what your tenant can afford. Be local to your submarket.
• 15. Crime trending down.

Hey Laith,

I would say being intentional about finding partners+lenders is the a way to go about it. You could reach out to them through BP and try to find someone who is willing to partner with you- as mentioned already coming up with a package/presentation of the deal will make this process a lot smoother and easier. You may hear a lot of no's but like many things in RE it is a numbers game. 

Best of luck!

Mark Kenney- Thinkmultifamily- has a very good analyzer that my team uses to underwrite all of our deals. 

You could always choose certain markets in both- good deals are not always easy to come by so having a list of target markets (not to many but a few) that you like the most could increase your chances of finding a deal that fits your criteria. 

Florida is the next stop for us! Not to sure what part yet we are currently in NC- raised here so just trying to change things up a bit in the near future!

It comes down to the business plan. If you are planning on exiting the property within a short amount of time the benefits may not be worth it- I would check with your CPA and/or cost seg tax specialist on it- Michael Blank interviewed a cost segregation expert on his show- episode 23 I believe titled "Save BIG with Cost Segregation for Multifamily Buildings"- they discussed cost segregation on SF + multifamily assets so I recommend checking it out!

Always be looking for deals even if it is competitive and seems like you are never going to find one that pencils out. I am experiencing a similar thing in my markets, however we are still building relationships with brokers, property managers, lenders, investors, partners, etc. The time will come that they do pencil out and when that happens we will be ready because we were taking the right steps before, not after.