All Forum Posts by: Account Closed

For those that are working with a property manager on smaller projects - say under thirty units - 

 I had five tenants vacate without notice from my 16 unit building.  This was ok because we were just about to start the eviction process because none of them were paying, and they had a bad influence on the overall community.  Once they were out the plan was to fix up the units and increase the rent by about $100/mo to get them inline with the market.  

The property manager has done a good job at saving money at ever step of the way, paint vs replace, negotiating payment plans with contractors to stretch out the cashflow etc.  But, it seems to have taken alot of time for the process to happen.  There is one company for paint, another for carpet, another for kitchen, etc.  It took about three months total to get the contractors lined up, work done, and per the PM, the units should be rented by the end of this month. 

This is an established property management company in the area.  So my question is - am I being too patient or does flipping this many units at once take this much time?   

@Ben Leybovich

I've already got one apartment building taken down as my property, but I'm looking to start building a track record of working with investors too.  You mentioned that there are a few other ways to structure things without the burden of a syndication - so lets day that I go in with a small handful of close friends/relatives, what kind of other structures are you referring to?  I see a few other structures listed in @Clay Manship's post, just curious as to others you may be thinking of.  

I'd be looking to take down a smaller multi (6-8 units) all cash, fix it up a bit, get better tenants in, and then do a cashout refi, or sell the property outright.  

In my markets and with the type of single family houses I have owned, I have both provided and not provided the W/D.  My process has typically been to buy a house that needed a little fixing up then hold it for a period of time.  So if the W/D was in the house already I left it there.  However, if it wasn't I just let the tenant know it was up to them to figure it out.  

In my apartment building I looked into building hookups for the W/D and it was prohibitively expensive.  Instead, I have made a stack-able unit available as a rental to the tenants.  

I would actually agree that the areas around military bases in Hampton Roads VA and Jacksonville FL are not the best. The only large corporations that seem to be within close driving distance would be some lower end grocery stores, and fast food restaurants. Think about the primary demographic located at/near bases - mostly younger people who don't have much money yet.

This may not be true across the nation, just my limited experience speaking.    

Awesome post, thanks for sharing! 

I have been actively monitoring Loopnet and Redfin in my target areas, but as has been stated already, alot of what is view-able there isn't at the most attractive prices.  But what you can learn through a combination of Loopnet, Redfin, and online property records is enough information to help you sort of analyze hypothetical properties.  Kind of like Algebra, you are solving for "X" which may be the bits of information you can't fine online.  

Armed with this information, now you can approach a broker and set up a relationship and have a better idea of what they are bringing you and how attractive it might be.  

Also on Loopnet, when you click on the property, you can then sometimes view the listing broker's other listings, which don't appear in the main search.  And since you now know the broker's name AND the name of their firm, it's a few quick easy clicks to get to their website and see what else they have listed there.  

CNU has almost single-handedly face-lifted a significant portion of Warwick blvd from JClyde to Deep Creek. Some of the folks who have been living in the area for longer than a few years might complain a bit, but I would argue that they have stepped in cosmetically and likely economically improved the area alot.  

There's a case to be made for finding a single family that you could maybe put students up in and rent out by bedroom.  The only Multis I know of in the area are the places that are like 50+ units, so a bit out of my price range for now.  

I ended up purchasing in Wards Corner in Norfolk.  Over the next few weeks I'll be posting more on my blog, so look for the story there to eventually show up.  

I agree with your concern about global warming, but let me submit this for your consideration (assuming you have no opportunities available in a non-flood zone).  Think about how long global warming will take to make a significant impact on the property, take the last 5-10yrs of rainfall and compare that trend to the rainfall 50yrs ago.  It's not just the water rising that's an issue is the water that's falling too.  The city may not have the ability to handle a higher flow through the storm drains.  With regards to the water rising - how long would it take for the water to rise enough so that the high tides in your area become a problem.  All of the above may be a distant enough problem down the road to not affect your current buying decision.  

Once you have the above, then make a judgement call as to whether it's a risk you're willing to take.  

I actually closed on a 16 unit building in Norfolk last Monday.  I too have family in the area, so it was a good reason and a good opportunity to invest there.  

The most availability of properties is in the Ocean View area of Norfolk.  They are redeveloping the southern end, so the trend should be in a good direction.  But, my problem with Ocean view is the "ocean" part of it.  I talked with my lender and he made the point that they are seeing more and more rainfall, plus more and more flooding issues.  Not that the area will be underwater tomorrow, but in his opinion, global warming is a real thing.  I personally don't want to own a property in a flood zone near water.  But, there's clearly money to be made for those with the appetite to take those risks on.  The city of Norfolk also seems to be putting forth alot of effort and money into making the city better, which was the big draw for me.  

Newport News (my hometown) has a few properties on the market now.  But the shipyard is also laying people off left and right, and they are the biggest employer.  Some would say there is a question about the transfer station (Ft. Eustis) staying too, but I don't know how big of a concern this really is.  

Hampton had redeveloped alot of the area around the Coliseum, there is a whole new shopping district and a few large anchor-type stores like Bass Pro in the area too.  But once you get outside of that general area, I don't know how much it is improving.  There is an 8 unit for sale in Hampton I looked at, but it's priced at double what any sane person would pay for it based on the last few years of information they provided.  

Virginia Beach is massive, and I haven't traveled much down there when I visited home, I get the feeling talking with a few friends that SF is a bigger deal. Over the past year, I haven't seen many Multis come across Loopnet or Redfin, and my broker never brought up VA beach when I was in the middle of my search.

Just my thoughts and opinions, not gospel.  

If you still have enough in your pocket to make a full cash offer, then I would offer to pay all cash and try to do the seller credit mentioned above.  This will fast forward some cash back into your pocket early on, then you can refi (likely based on the purchase price if done w/in the next 12mos).  With a few months of the cash coming in, and the refi a few months later you leave yourself in a stronger position.