All Forum Posts by: Theo Hicks

I would consider finding a local owner who also managing properties. Or interview a handful of local management companies, making sure they don't have the same fault of your first hire. Don't give up just yet!

A false belief: that they have a say in the business plan or that they can send you a bunch of questions for each deal without ever investing.

Fear: losing my equity investment, investing with a syndicator who hasn't completed a deal before

I would also consider investing in apartment syndications. They are also passive and have higher historical returns.

I'd recommend performing research on the REITs by simply Googling their name. Should take you to their website with more information about the REIT and how to invest.

Here is a list of public REITs on Wikipedia: https://en.wikipedia.org/wiki/List_of_public_REITs_in_the_United_States

You can if the 5+ investors have an ongoing active role in the deal so that it qualifies as a JV. If the investors are entirely passive, it is a syndication.

Hi Christian,

1. I personally haven't come across a deal where the listing broker withholds the financials until you submit an LOI. However, I have come across deals where you cannot tour the property until you submit an LOI

2. If the investors are completely passive (i.e., they are funding the down payment and that is it) then it is a syndication. But with all legal questions, always confirm with an attorney

3. There are a variety of methods for finding off-market deals, with direct mailing being the most popular. You can also find on-market deals through brokers. The best long-term strategy is to build relationships with brokers with the goal of getting them to send you deals before they hit the market. 

4. Generally, if you ask the broker "what cap rate do you expect this property to trade at?", they will tell you. Ben L. offered solid advice about how to think about cap rates in his post.

5. If a deal is on the market for more than a year, something is either really wrong with the property/market or the seller wants an unrealistic price

6. Taxes and insurance should be included in the NOI.

Hi Christopher,

Once you make a spreadsheet, the next step is to underwrite live deals. Most brokerage's listing allow you to download the financials online. I would try to underwrite a few deals each week and then check back in to see what they sold for. Once you gain more experience, you can start contacting the listing broker with questions/feedback on the deal and even set up property tours. But I would wait to do that until you are actually able to pull down a deal if the numbers make sense.

Hi James,

I am confused on what issue you are referring to? Is your client wanting to acquire a house with an FHA loan and not occupy the building?

Hi Jason,

Interior value-add:

• Upgrade to black, faux SS, or SS appliances
• Tile backsplash in the kitchen
• New cabinet doors or new cabinets
• New cabinet hardware (door and drawer handles)
• New countertops or resurface counters
• Install modern light fixtures
• Install new bathroom fixtures (faucets, shower heads, toilets, vanities)
• Tile surrounding the tub
• 2" blinds
• Vinyl wood plank flooring
• USB outlet ports

Exteriors/Other (for a 30 unit - you have more options when you are acquiring larger 100+ buildings)

• Rebrand (i.e., new property name) and new signage
• Landscaping overhaul
• Upgrade laundry facility room
• Balconies or patios
• Green program
• RUBS