All Forum Posts by: Josh Eitingon

@Tyron McDaniel, depending on the location, the cost of construction can be very prohibitive to what makes sense to build.  Ground up construction for a B class asset vs. A does not have that much of a gap in cost.  For it to make economic sense (in most cases) if you are building new it really needs to be Class A.  

@Bill, yes.  Especially once you get into the 60 unit+ space a good pm will be able to manage all of your onsite staff.  Even less there are great PMs that manage really well.  I'm from NY and only invest out of state multifamily.  Multifamily allows to scale and there are very professional management companies that you can reply on.  

I just can't compete with the cap rates around where I live for it to make sense for me and my investors.  

Lol, to Steve's point Californians definitely have a stigma about them as out of state owners (for some reason.)  

-Josh

@Evan there is no right answer and it is all negotiable.  With an equity partnership we would traditionally structure it with three fee components.

Acquisition fee- for your work upfront (1-3% of total deal paid to you closing)

Asset Mngmt fee- for your day to day work. (1-2% of gross rents collected paid to you monthly)

Cash flow- split to you and the investor.  Usually somewhere in the range of 70%-90% to the investor and the remainder to you.  

Let me know if you have any questions and with some more specifics I'm happy to give my suggestion.

-Josh

Construction loans are definitely easiest to get once you hit the 1M loan amount.  I don't think you'd be there with the GA property of 18 units.  I'd suggest a private lender lending as a first position note holder.

Hi Nicole,

I'd suggest spending some time diving into the private money / partner world.  With you being a realtor and having that expertise you can be the one to bring the deal and knowledge utilizing a partner for help financing/ funding.  

-Josh

@Art Pulphus depending on the size of deal and familiarity of the broker in multifamily, there may or may not be one.  Keep in mind, your pro-forma may be very different from a broker's.  If we are far apart in price I'll offer to share my pro forma and talk through any discrepancies.  

-Josh

@Ryan Howard, I agree with Jerry. Great suggestion to look into FHA products. Educating your self on the private money world will only help. If not for this deal for the next. Take your time for the first one to be right. You especially want to make sure that first is a good buy, able to kickstart your investing career to the next.

Best of luck,

Josh

@Account Closed and @Josh Caldwell.  I agree with Josh, that it makes sense at a high level.  That said, the company that I worked for started with the fund approach rather than the individual deal syndication model.  There was enormous pressure to keep that money moving.  A couple of deals not closing and/or being dragged out can really hurt the investor yields.  

Best of luck,

Josh

@Josh C., any real estate attorney can definitely help you set up the structure.  There is a cost associated with it but, I think the piece of mind associated with creating the LLCs is well worth it.

Completely agree with @Mark F.  I do own property where we have onsite staff and property management.  Is it possible to have the management done with a formal management company?  I suppose.  But, to Mark's point I'll gladly pay the 5% for the added professionalism and stability that a good property manager brings.