All Forum Posts by: Michael Tomasino

Hello,

We created the Charlotte Multifamily & More Investing Club where people new to real estate can meet up and network with real estate professionals. Our groups' mission is to create a local and global community of diverse people interested in multifamily real estate investing, who will support, challenge and inspire one another by providing a platform for networking, mentorship, continued education and virtual events (for you out of towners). We encourage you to share your knowledge, ask questions, participate in discussions and become an integral part of this community. All are welcome!

This group will move likely have it's first in person event on September 19th. TBD.

https://www.facebook.com/group...

Thank you,

Michael Tomasino

Managing Partner - Amber Real Estate Partners

@Cedric Volkmer -Like that you're looking outside the box....Hotel conversions are tough, because of the building layout and in most cases the location. If you're in Manhattan then the building layout looks just like other available products. The conversion, assuming the cap ex doesn't kill your returns, and the underwriting checks out....yea you could have a good repositioning plan. But if it's in the outskirts of Dallas it could be hard to reposition the hotel to a NOI producing investment. I could write a book on the reply but reach out directly if you have any specific questions.

@Przemek 

@Przemek Kos I would agree with Rich, I would be suspicious of 5% unless the deal was less than 1 m. Currently, myself and other syndicators in my network charge a 1% to 2% acquisition fee and 1 to 1.5% AM fee. Feel free to reach out if you're looking to get connected with some current offerings from syndicators (my person network).

@Adam Steinberger - Plenty of options out their...lawyers cost a bunch but if you've done your research about the firm and their reputation I would suggest eating the expense to fully learn about your options. For example, their are trusts that protect your assets and give you control of the distributions. Usually in conjunction with an LLC where you are the owner of the LLC and the investments are owned by the LLC. Upon your death you can have the assets ported to a trust where the rules of the trust are governed an appointed person or law firm. Like someone mentioned you could put restriction on who gets what based on conditions or lifestyles...My point is that their are many options available to you. Feel free to reach out with any questions.

@Elias Kaplan Congrats getting into RE. Since you have a full time job, I would pick one market and learn that market in and out. For instance, Tampa or Orlando are hot markets in Florida. Currently, you don't know what you don't know, so it might take some time to work out your deal criteria and market research...For instance, looking for a cash on cash return of 10% is a good goal, but what about appreciation, hold periods, unit type, unit class etc...how does the 10% COC tie into you personal goals for investing? All these questions can point you in a direction the focuses your market area and time you'll need to learn the market without burning out. Feel free to message me directly if you have any questions. Take care.

@Cindy - Do you have experience modeling?

@Cindy - Is that new, 30 year HELOC....I've seen 10 years on an HELOC and 6% seems high. Then you'd have to open another HELOC or refinance. My suggestion would be to underwrite property as a new deal and find the sweet spot for CoC returns when using the HELOC and then a second model where you refinance. Personally, I would take us much out as possible and reinvest it somewhere else assuming it met my goals to do so.

@Alicia - Sounds like you have your answer. Three days does not sound fair at all. You can always use a page from Chris Voss and use ask them "I need to get....XYZ to move this....How do you expect me to do this in 3 days? I am guessing they'll give you more time.

@Lynette - I would ask the seller to provide the lease and any supporting documentation that could include credit checks, background checks etc. Odds are you won't get much besides the lease. The good news is that the tenants are month to month. I would absolutely ask them to sign a 1-year lease, at that time you can run the background check etc...maybe even add in a few fees to cover the cost of the reports. Also, you can up the rent on that one unit. I am not familiar with CA laws about rent caps but I believe signing a new lease that is not a renewal allows for higher rent increases. I would double-check with a local property manager. In addition, if the residents what to stay month to month then the rent should include a premium.

@Michael - Usually people underwrite in 2% to 3% annual rent bumps. You'll need to do a rent comp analysis for your market to identify what you could be getting for your properties. If you are well below market then I would expect the tenants to leave. This is not the worst thing because it gives you the opportunity to fix up the place if needed or make upgrades that could allow for even higher rents. 

Typically, I would adjust rates at every renewal especially if your current leases are way under market. Not to complicate things, if you are close to market rents and the tenant indicates they will definitely leave then you should look at the cost to turn the unit vs the rent increase. Might be more profitable to not increase for one year. Then next year you'd need to add in the prior year in increase plus the current year increase.

I am against putting it in the lease as well unless it's a commercial lease then that is standard. Say you put in 3% bumps but the market rent goes up 10% then your out 7%. 

Don't tell the resident anything....I send the lease renewal with the new rate included. If they ask why? Say, This is market rent for your apartment. The more you say the more likely they will try to negotiate or find a foothold to argue about it.