All Forum Posts by: Jeffrey Holst

@Austin Works wholesale it or find a partner willing to give you a peice of it for finding it.

@Stephen Diaz imo syndications are not something a new investor should try. We have been investing for 10+ years and only recently felt comfortable taking investors money into our deals. Also we typically front 20-50k in due diligence and related costs to our syndication before we are able to close it. We do get that back at close but if the deal falls apart we are out that money. With a 1mm dollar raise as you indicated these costs could easily be even more. Track record is key. People will accept a lower projected return from me than they will from someone who has done less deals. Taking investors money is a big responsibility and you need to be comfortable with all the variables or you will find it very difficult to raise any cash at all

@Sean Welch it depends on the deal. If you are doing a buy and hold yes it would take a long time to pay it off but it also takes a long time to pay off a mortgage. Time frame doesn't mean it's not worth doing. That being said we use lines of credit primarily as a bridge loan to either buy and flip something or to buy something we plan to refinance with a more traditional mortgage product in the short to medium term.

@Brendan Harvey imo go buy a deal and then talk to a CPA or lawyer if you need to. People over think this. Find a deal that will make you money buy good liability insurance and when you start making money find a CPA to help you keep some extra bucks and a lawyer to protect the bucks you have. But step one is make some money.

I feel like no one has stated the obvious here. It's a rate vs return issue. If you can invest money at a rate higher than you can borrow it at it's doesn't make sense to pay down debt. Cost of money is still insanely low with commercial loans still well below 6%. It's simply way to easy to get more than a 6% return on investment property therefore unless one actually is in a situation where they don't want any more money they should be borrowing as much as they can and putting it in safe assets. All issues concerning risk and debt can be mitigated by making smart investments, for some that might be limited partnerships for others it might be large non recourse deals and others it might be single families in a market they know well but in all cases if one can get 7%+ returns and can borrow at 5.5% it makes no sense to pay down debt or hold free leverageable assets. Full disclosure I have some free and clear properties but I feel bad about them and I plan to sell them to buy bigger deals or leverage them to buy new deals as soon as possible.

Originally posted by @Lamaine Hargrove:

Hey guys! Sorry the late response. Right now i am listening to

the podcast off and on for help cover everything and still reading. I am doing the numbers for properties looking and applied to a couple hard money lenders so i can have the funding for my flips. But the main goal is to take the flip money to fund my multi families... but that's another story. Starting to make offers. I will have bought my first property by the end of the year, as long as i keep pushing. thanks again and wish the best to everyone's successes.

That's an exciting time in investing when you are working towards your first deal.  I knoe you can do it.  Keep focused and good things will happen.

Also congrats to both of you.  10mm is a big deal for sure.  Hope you hit your 15mm exit position.

I'll second the complete guide to buying and selling apartments.

Originally posted by @Sam Grooms:

Originally posted by @Matthew Cain:

@Ben Leybovich That is awesome! I'm from Phoenix area and love the market. What books or resources would you recommend for newbies who are interested in investing in multi-family?

Matt, Ben mentioned Dave Lindah's book, Multifamily Millions, but there are some other good ones, too. 

I really like The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges. Not a lot of fluff, just a lot of teaching. 

Then there's The ABCs of Real Estate Investing by Ken McElroy. 

Those three books will introduce you to a lot of the basics of multifamily investment. 

I like the concept of this thread. Not sure I want to admit the dumb stuff I have done as an investor.  Most of which revolve around me hiring tenants to do work for me.  I could imagine me doing that with quarter round though.

I feel like this is dependent on your situation and the local market. What is best to build to rent...well how many units can you afford to build? what's your experience like? What kind if rents do each category get in your market? etc.  

If I were trying to decide this I'd figure the cost per unit to build each one and then look at the expected rent for each category and create a ratio.  For example 

If townhomes cost you 100k let unit to build and duplexes cost you 60k per unit the first thought would he more units can be done with duplexes than townhomes but it's also important to consider rent for each so if townhomes rent for 1000/month and duplexes rent for 500/month per side it would seem that townhomes are the better deal.  Based on the following formula 1k/100k = .01 or 1% where as 500/60k =.008333 or about .8333% which means that for every 1000 dollars spent on townhomes you return 10 dollars a month in rent where in duplexes for every 1000 dollars spent you only return 8 dollars and 33 cents.  I'd also probably want to consider the expenses associated with the units the very best ratio is probably  expected Net Opperating Income Per dollar spent on building.

Hope that helps