All Forum Posts by: Jonathan Makovsky

@Karin Crompton @Account Closed: Thank you very much for the support! 

Looking forward to all of us sharing in many more successes together!

Congrats! Way to hit it out of the park @Tarl Yarber!

Thanks so much @Mark Kurian and @Christopher Gilly!

@Griffin F., yes there is a value-add play. Also, the way the building was set-up as condos, so selling them off that way is an alternative exit strategy.

@Rob Beland - Thanks so much!

@Michael Noto - Thank so much for the kind words. Looking forward to seeing you in New Britain, CT and hoping we can do some work together. You are the BP resident expert with lots of great experience, and we will be looking to grow our portfolio to begin scaling operations.

@Tristan Cortez - Thank you!

@Griffin F. - Thank you very much! We will self manage at first, because as we need to implement a new management style in the building, and no one will be more hands on then we will. After that we will decide which direction we want to go. Our goal is to scale up our rental portfolio and hire in-house to build our property management and rehab management portfolio. 

@Allen Thomas - Thank you, really appreciate it!

@Adrian Chu - Much appreciated, thanks!

@George Paiva and I closed on a different asset class than our single family flips. We purchased a 16 unit in New Britain, Connecticut.

We purchased it for $505K (~$31.5K/unit) and average rents are $675. Top line numbers:

• Revenue: $118K (incl. projected vacancy)
• Expenses: $72K (incl. projected CapEx, R&M, Mgmt fee)
• NOI (Net Operating Income): $46K
• Debt (Mortgage): $23K
• CoC (Cash on Cash): $23K

• LTV (Loan to Value): 75%

A few notes:

1. Don't be fooled by the holy grail 2% RULE. Yes, it worked here, and it's a great way to quickly analyze a property, but just note that every city and property are different, and the "rule" ONLY looks at the 'top line' and ignores expenses. In the case of New Britain, CT, the RE taxes are very high (48 mill rate) which is $20.5K annual taxes (17% of our expected revenue). Our saving grace is that most of the utilities are metered out, and because the units are a big size (duplex 2BR/1.5BA) we can still rent them at a solid price. However, if expenses in your area or on your property are higher than "normal" you even-more-so need to make sure you are looking at the full picture and including your operating expenses of the property.

2. The deal was picked up off-market by a seller that we've done a few deals with in the past. Lessons learned here: 

 a. Be a good person to everyone! It's not only the right thing to do, it's an excellent way to do a lot of business.

 b. Experience is crucial! The seller would not have done the deal with us if we were newbies - he wanted someone that he knew can close on it. So if you're still trying to work on your first deal all by yourself, don't be afraid to give up some of your well deserved profits to bring someone on that can help close the deal and gain that experience. Experience leads to more deals, and more deals leads to access to more money, and access to more money leads to even more deals. [Do you follow the chain of events: Deals --> More Deals --> Access More Money --> Even More Deals --> Even More Access to Money --> Helluva Lot More Deals --> Helluva Lot More Access to Money.] We are at the earlier part of this cycle, but we already see how things snowball.

3. I learned everything in a guru course for $9,997 - and you need to take this class!! (<--- THIS IS AN ABSOLUTE LIE!) I luckily found BiggerPockets which has been an absolute godsend to our business and me. I mentioned this in previous posts, and BP has been the underlying key to our success. BP is where I found my business partner, it's how we learned to flip, analyze deals, find deals, market strategies, phone scripts, grow our business, find relevant books and so much more. BP offers a real estate education that no one guru can come close to teaching, and it's all free! 

If you're new to the real estate game I would strongly suggest that you listen to the BP podcasts and take action on what @Joshua Dorkin, @Brandon Turner and their weekly guest is saying - their words are worth their weight in real estate gold. If you're like me then you will start to notice that a lot of successful podcasts guests have similar stories, have read/recommended similar books, have similar investment strategies, and then hopefully you will begin to mimic those things and then of course go out and do it and succeed! 

Also, if you need help or a partner what better place is there to find possible business partner(s) then BP?

4. Stick to your numbers and don't be afraid to keep offering your price to the seller. All of our offers that ultimately was accepted has been rejected multiple times first - and sometimes this spanned over the course of many months - before our deal was finally accepted. I believe this 16 unit deal was under contract a few times with other buyers for over $600K before they all flamed out. The seller continued to reject our offer until he realized we were his best offer and most reliable buyer. 

Hope this could encourage some of you and I really look forward to hearing all of your success stories! 

@Kim Handelman, I had the exact same comments as @Karin Crompton:

1. Where are you pulling your comps from? Same building? If not, what are the HOA fees there?

2. Is flood insurance required? If yes, how does that compare to the rest of the market (i.e. are there many areas in Madison in no flood zone areas, which will make this a harder sell).

3. How do these HOA fees compare to others?

4. Assuming the assumptions in your calculation is correct (repairs cost, ARV, etc.) I think your calculation looks good.

Some possible advice might be to locate a local Realtor with an EXCELLENT knowledge of the area, and that you can trust. This might help get your first deal done, even if you need to cut into your profit. Doing a deal will propel you so much that in my humble opinion it's worth every penny (or in this case 500,000 pennies if you split it in half). Also, the Realtor might have a buyer for you too.

Welcome @Kevin Trumbull! My alerts are going off because your last name is a city we invest in (which is a good time to let you know to set-up alerts, if you haven't already so you can be notified when something/somewhere is being talked about).

Awesome to see you on the site, and looking forward to hearing some success stories from you! 

Hi @Tevell Williams, I think many of us here can relate to you because anyone that's experienced success has likely experienced many failures first. 

If your drive is there, you will do it!  I cant wait to hear you crush the exam. Wishing you many successes!

Congrats!

Congrats @Brie Schmidt! It's been great following your success stories - this is fantastic! Keep up the amazing work.

[Is it time to 10x the goal to $350K/month?] :)