All Forum Posts by: Jorge Abreu

Larisa, my other comment with the link to my Meetup was removed. Find me on Facebook at jorge.abreu and yesterday I just posted a list of upcoming events for Multifamily Investors for this month and October. And I usually post the list every other week.

@Nick B. I agree that there are other groups out there adjusting that exit Cap to low to increase their projections. We focus more on making sure the property cashflows and we stress test it. The truth is it's impossible to really know what the Cap will be 5 years from now. But if the property has a healthy cashflow and a good cash on cash return then you should be good on your exit as long as you didnt pay way over market for it.

💥 In today's market you really need to be able to correctly sharpen your numbers when making offers on Multifamily properties!

👉 From your rent comps, taxes, insurance, payroll, CapEx, debt, etc... You need to put in the time, use the tools & power team that will determine the most accurate & proven numbers.

This way you can confidently submit your highest & best offer without a doubt.

I spent a good portion of yesterday really dialing in on the CapEx needed on a deal that we are submitting highest & best on.

👇 Do you take the time to really dig in on the numbers when submitting offers or do you use rule of thumb numbers?

@Joseph Firmin Thank you for the feedback and below are the answers to your questions.

Did you use your own cash or syndicate this one? 

• Used some of my own cash and also syndicated. 

Also, what is the process to buy with a bridge loan and then "setup for refinance into long term agency debt"? 

• If you are purchasing something that doesn't meet Agency debt criteria you can go in with a bridge loan and get it sized up for agency so you know what numbers you need to meet and then refinance once you hit those numbers.

I'm looking at larger multifamily deals right now and have heard the "agency debt" phrase before. Is this just large commercial bank loan? Thanks!

• Agency debt is government backed through Fannie Mae or Freddie Mac and usually has the best terms but you need to be 90% occupied and meet some other standards. 

@Brian Adams Great job getting that offer out there! Good luck on the next and dont forget to follow up until they tell you the deal is closed. We are having to analyze a lot of properties to find the good ones in this market but they are still out there. 

Investment Info:

Large multi-family (5+ units) commercial investment investment in Lawton.

Purchase price: $6,170,000
Cash invested: $1,800,000

Multifamily consisting of 216 units Located in Lawton, Oklahoma

Acquisition:
Purchase Price -- $6,170,000
Capital Improvements -- $1,193,750
Closing Fees & Carrying Costs -- $156,250
All In Cost -- $7,550,000

Stabilized Projections:
Net Operating Income -- $737,659
Cap Rate at Basis -- 9.8%
Stabilized Value -- $10,540,000
Equity Created -- $2,990,000
New Loan Amount -- $7,910,000
Refi Loan Proceeds -- $360,000
Annual Cash Flow -- $213,507

What made you interested in investing in this type of deal?

✅ Purchase Price of $28K per Door
✅ Property Condition Newer Roofs, Well maintained, No Major Foundation or Plumbing Issues
✅ Property Characteristics Individual HVAC & Water Heaters, Great Unit Mix, Large Floorplans, Great Amenities Including Pools, Gym, Sauna & Playgrounds
✅ Cash Flowing from day one
✅ Conservative Underwriting
✅ Cost Segregation

How did you find this deal and how did you negotiate it?

Located the deal by calling building owners off a Costar report.
The owner was a broker and had it listed but was not with one of the major players.
Property consist of 216 units & Located in Lawton, Oklahoma
Purchase Price $28K/Unit - Very Attractive!
Value-Add Project with rents under market and currently no units upgraded & was self managed.
Ask Broker or owner several questions about vacant units, value add, current management, Capex completed, etc… The more questions the better - don't as

How did you finance this deal?

Bridge Loan at 80% of LTC (Loan to Cost) and setup for refinance into long term agency debt.

How did you add value to the deal?

Upgrade all vacant units
Renovate the exteriors and add curb appeal
Upgrade amenities
Raise rents to market

💥Paralysis by Analysis💥 is the state of over-analyzing (or over-thinking) a situation so that a decision or action is never taken, in effect paralyzing the outcome.

👇 Comment and tell us what Actions have you taken in the last week and plan on taking this week? And have you fallen victim of Paralysis by Analysis?

Here is my two week snapshot:
✅ We submitted over $300 Million total in Multifamily LOI's (Letter of Intent) last week. In highest & best now for those deals and will be submitting revised numbers by the end of this week.
✅ Also submitting another two LOI’s this week separate from the highest and best ones. Will have over $350 Million out in LOI’s by the end of this week.
✅ Working on implementing our business plan and stabilizing two of our Multifamily property acquisitions.
Touring one property this week that we have an accepted LOI on.
✅ Waiting on a PSA (Purchase and Sale Agreement) for another property we got our offer accepted on a week ago. It’s an off market deal and the seller is taking their sweet time. Hopefully he won’t flake on us.
✅ Setting up some meetings & phone calls with a couple of individuals that would like to be part of the GP side that have a large amount of liquid funds to help cover some of these upfront costs. Because if everything we are working on hits we will end up having a significant amount of funds tied up in deposits.
✅ Working on continuing to build our construction company, JNTDevelopers, and always improving our systems and customer service. While adding the right pieces in place to continue to grow.

💥 I'm a strong believer of analyzing and not just jumping straight into action but you have to be careful not to get stuck just analyzing to the point you never do anything. Set your metrics and your pass & fails, then once it all checks out don't hesitate to pull the trigger and TAKE ACTION!

Thank you @Yonah Weiss for the mention. 

@Pundari Pothini here is a link to sign up and receive info on our upcoming events. 
https://mailchi.mp/elevatecig/signup

Our last event had 150+ experienced as well as beginner Multifamily Investors. Our panel had over 10,000 Units under management. Next one will be early next month.

@John Fortes Yes sir. Getting my feet wet in Bigger Pockets. Just did my first blog as well. Check it out: 
https://www.biggerpockets.com/member-blogs/12307/86308-multifamily-acquisition-216-units-step-by-step-behind-the-scenes

Thank you for your feedback. I just started posting on bigger pockets and I appreciate your support. I should have made it more clear that I am in experienced Multifamily syndicator and also a passive investor. And that these are questions I suggest all passive Investors ask before they invest in a Multifamily Value Add Deal.