All Forum Posts by: Mike Dymski

I am using construction vendors (flooring and painting) that specialize in multifamily, which are different than what I previously used for flips and SFRs.  The price difference is significant and they are very efficient....plus they are large and will be around for the long haul.

I am using wood look sheet vinyl as well...in the kitchen, baths and living room and carpet on the stairs and in bedrooms.  The vendor is quick, large and affordable.

Carpet - 18 oz Shaw nylon, $10.20/yard installed, $50 for stairs

Vinyl - 10 year Shaw, $11.79/yard installed, $1.25/foot shoe mold, $25 reset a toilet

It's my understanding that the vinyl is easy to repair.  It looks great...the tenants love it.  I priced out the glue down LVT but that was too pricey for this C class project.  My friend owns a flooring company in NC and some of his developer clients are putting the sheet vinyl in new construction A class properties.

There is good feedback here.  I'd recommend (1) having in-depth conversations with PMs on their contractors and pricing and (2) getting your financing package and lender lined up.  Many investors find property management for either a handful of units or 100+ units to be less challenging then for a portfolio that is in between the two.  I had to find multifamily contractors (flooring, painting, maintenance) for my PM.  She had some but they were not affordable or responsive enough for MF turns.  Regarding financing, I'd recommend getting referrals from brokers and starting a vetting process.  There is a significant amount of diversity in lenders appetites (and products) for multifamily, especially if your loan is less than $1MM.  You can spend 20 minutes on the phone with each lender on your list and narrow down the field to those lenders who have an appetite and product that fits your strategy and property type.  Next step could be a more detailed in person conversation where you bring your financing package and they can let you know their interest level.  Using a commercial mortgage broker can be very helpful as well as they have the lender network already in place and can compile your financing package (likely will not compile the package unless you have a deal in the pipeline).

https://www.biggerpockets.com/forums/12/topics/247...

Check out the post above and search sfr vs multifamily and you will find other posts. Most people will discuss the following benefits of multifamily (1) economies of scale (2) for 5 units and above, you can impact the value of the property by increasing the NOI (3) efficiency...all units in one location (4) some regional multifamily vendors/contractors for things like painting and flooring are very affordable, quick, have systems in place and will be around for the long haul.

For me, I moved to MF because I had too...not enough time to source SFR.

One of the biggest challenges you will hear about MF is finding good property management if you have to outsource.  Some investors will suggest that you have to scale enough in MF to be able to hire your own staff; otherwise, the challenges with 3rd party PM will make the deal unprofitable.  Hope this helps.

@Jeff Greenberg Thanks for the ideas.  I like the idea of annual or some other cycle journal entries.  I would not be crazy about having her pay the mortgages and insurance policies.

If anyone is interested, please share some of your deal figures and results.  Success stories can be motivational and help us all understand the market better.

thanks, I asked her about that and she said she could not do that. I will revisit it with her.

Do Fannie and Freddie pay a majority of the closing costs and, if not, what is the ballpark %?

Depends on your goal and market.  If your goal is appreciation and/or that's what your market bears and you have forecasts of declining values, that's a tough spot.  If your goal is cash flow and long term hold and you can find that cash flow, then a short (or long) term dip in property values should not be problematic as long as you continue to cash flow at your target levels.  My rental property values likely dipped during the recession but rents actually went up a little....not sure what your market bears.  I'd rather be in stable cash flowing real estate in a recession than other asset classes.

Nice work, cap ex is the hardest figure to estimate.  Some feedback:

Your estimated life appears to be for a new property and you may want to adjust for the actual remaining life of the existing items.

If you have not included the following items in repairs and maintenance, you may want to include them here: appliances, cabinets, counter tops, lighting, tubs/shower, windows, doors, gutters and porches/decks.

Interior paint - 6 years seems long...$2500 seems high...not sure on size

Flooring seems high - not sure on size...regional flooring companies in my market are very affordable and reliable

Plumbing and electrical - I don't have plans to re-plumb or re-wire units every 20-30 years but do include estimated cap ex for fixtures.

Off topic but consider LVT rather than laminate wood...it's very durable and can get wet.  I'm actually using vinyl sheeting rather than the LVT for apartments but investors swear by the LVT.