All Forum Posts by: Mike Fingleton

Hi @Khaled El Dorry

Bundling multiple properties for a 1031 exchange can absolutely streamline your path to bigger deals, and it sounds like you’re in a prime spot to make the jump. A good friend of mine, managed a similar transaction last year: he merged several single-family homes around Florida and exchanged them for a mid-size apartment complex in Chicago. The key takeaway was timing...selling each property in a way that allowed him to hit the 45-day identification period without rushing into a subpar deal.

In your case, with SFHs in Jacksonville and Ocala plus that duplex in Port Charlotte, I’d look at where each market stands right now and figure out if there’s a single buyer who’ll pay close to fair value for the whole set or if you might do better by splitting them up. The Port Charlotte duplex...given it hasn’t suffered hurricane damage...could command a pretty penny on its own.

I recall reading a piece in Forbes that suggests certain Florida markets could remain strong for years, which might help you gauge whether now is the right time to sell. I was talking to an investor who bought a multifamily in San Antonio recently, and the rent growth here has been eye-opening. If that sparks your interest, i'm curious which market you’re leaning toward for the replacement property...are you thinking high-growth spots like San Antonio or somewhere smaller like Omaha?

How are you approaching the process of lining up buyers for each property? I’m sure the community here has a bunch of insights, so I’d love to hear what you’ve got in mind before you pull the trigger! It’s realy exciting to see how people reposition portfolios these days.

Hey @Nicholas Dillon, when I first dipped my toes into syndications, I remember feeling the same hesitation.. the returns looked tempting, but something about those shiny numbers made me think twice. A buddy of mine once rushed into a deal that promised sky-high cash flow, but the sponsor’s experience was thinner than a shoestring in Times Square. Long story short.. they inflated rent projections, sliced corners on property management, and almost left him holding the bag when the actual numbers came in.

Vetting a syndicate means getting cozy with the sponsor’s track record, verifying their underwriting approach, and understanding whether they’ve handled rough waters before. If they’ve never weathered a rocky market or interest rate shift, their pro forma might be built on wishful thinking. Diving deeper.. check who’s on their team, how they structure their deals, and whether you’re comfortable with how the profit splits work. Some folks want a seat at the table and real control, while others prefer to be passive.. letting the sponsor do the heavy lifting.

From what I read in The Economist, some markets (like Phoenix) are experiencing fresh pockets of growth in multifamily, so it’s definitely worth exploring if you’re eyeing future expansion. And if you want an extra layer of confidence, find an investor-friendly real estate attorney or a knowledgeable friend who can help dissect the operating agreement. My friend had a client who nearly missed a crucial clause that let the syndicator raise additional capital from new investors, which would have watered down existing shares in a pinch.

But it all comes down to how hands-on or hands-off you want to be. After all, real estate investing can mean different things to different people, and not everyone wants to deal with constant reaserch or property management fiascos. Where do you see yourself focusing next year?

I have had really great feedback about Dominique Leal. Very responsive and great market knowledge! I can PM you his information. We have sent over a few referrals to him and they have given us great feedback when we asked how their experience has been.

Hi @Zach Fulton - that's quite a juggling act you've got going on.. I've been down that road of carrying a line of credit on a property before, and the stress can realy pile on when you're staring at that monthly interest. One thing that's jumping out to me is how your House 3 has some serious potential once you carve out that above-garage apartment. Even though you're not fond of DSCR loans, it might serve as a bridge to free up your line of credit for quicker flip-and-reno opportunities.

I remember years ago, a close friend of mine was in a nearly identical situation.. from what I read in Forbes, he ended up with zero wiggle room each month. He ultimately refi’d into a loan that felt hefty at first, but it freed him up to add another unit in the building. Once that extra rental started generating income, he realized the higher interest rate was just a temporary hiccup on the way to bigger returns.

In your case, maybe look at a structure that keeps your best cash-flow property on a lighter refi (say 50% or 60% LTV) while you go a bit heavier on the one that's not producing as much right now. That way, you might preserve some of your monthly profit while still knocking out that line of credit. Alternatively, you could split it between House 2 and 3 in a way that covers your building budget for the apartment. And if your investor friend's private loan helps fill in any gaps, it might be worth considering that short-term pain for long-term stability.

What do you think you’d focus on first... paying off that line of credit as fast as possible or jumpstarting the renovation to boost cash flow right away?

@Dennis Bragg I especially agree with you that "thinking about older buildings.. some folks underestimate how well older properties can hold up". We just finished one flip with a $120K spread that literally no one else wanted to touch due to the age...!

I read an artcile in The Economist not too long ago that mentioned how smaller towns like Jasper can offer stable rental demand if you play your cards right... I’ve spent years exploring off-the-beaten-path markets, so Jasper definitely caught my eye. The appeal, in my experinence, is a steady local base plus some vacationers passing through.

I’ve got a freind who scooped up a place near the Ozarks and found that while huge cash flow was harder to come by, the consistent occupancy gave them fewer headaches over time. A big part of the puzzle is making sure you run a solid cash flow analysis. I’m talking about getting thorough with expense estimates, factoring in property taxes, insurance, and a cushion for maintenance. Others rely on networking... hooking up with probate or divorce attorneys who sometimes have leads on properties that aren’t widely marketed.

If you decide to hire a property manager in the Jasper area, maybe chat with a few owners who’ve used them. Meanwhile, if you ever consider other markets for diversification, places like Omaha, Chicago, Austin, San Diego, San Antonio or right here in Phoenix each have their own flavor of opportunity.

Out of curiosity, how do you see Jasper fitting into your broader investment goals?

Hey Selim @Selim Tezcan wow.. that’s quite a transformation you pulled off with this single-family home! I see you invested a serious amount of sweat equity (and real cash) into turning it into something practically new from the inside out, and it looks like it paid off in a big way. Going from a $232K purchase to a $575K sale is no small feat, especially with a full excavation of the foundation and reframing involved.

I’ve got a buddy who tried something similar outside San Diego last year.. he had to reinforce the entire property with a new slab and rebuild the interior layout from scratch.. definitely not for the faint of heart, but his final sale price turned heads in that local market. In your case, it sounds like a similar story.. you identified a property with potential, tackled the structural work, and brought it back to life in a way that justifies a higher price. I recall reading in Forbes that major foundation fixes can add surprising value, becuase it addresses the single biggest fear buyers have.. a shaky structure.

From my three decades in fix-and-flips, Ive noticed how important it is to have a team you trust.. from attorneys who know probate deals to realtors willing to drive for dollars with you, scouting hidden gems. I also reccomend lining up a contractro early, realy early, from what I’ve heard, so you can keep everything on schedule and budget.

So now that you’ve tackled what most investors would call a major job, do you see yourself repeating a similar strategy.. or do you feel like branching out into something else?

@Blake Kirby

Hey Blake, and everyone else.. I cant believe I stumbled on this post from way back in 2019 while researching Phoenix vs. Los Angeles market trends. I recently came across a piece in Forbes talking about how quickly rental dynamics can evolve when population growth spikes.

I’m based in Phoenix and have been in the real estate game for three decades, and a close friend of mine recently reminded me how the right connections can shape your entire strategy. He had a client who was debating between buying a small apartment building in L.A. or spreading out capital on multiple units in Phoenix.. after running the numbers with a dedicated local realtro who actually drove around neighborhoods, he opted for Phoenix because he could get more doors for the same cost. Although Im not saying that’s always the right call, if you care about monthly cash flow and year-round sunshine, Phoenix can look mighty appealing. That kind of networking plus honest cash-flow analysis can open more doors than simply chasing rumored off-market listings.

Interestingly, I recently saw a property here in Phoenix (ARMLS #6757476) that sold for around $450K in October 2021, then resold in December 2024 for $1.8 million.. that’s an eye-popping $1.35 million jump in just three years. Not every deal will see that kind of rocket fuel, of course, but it does show the kind of upside some Phoenix investors captured. If you’d been holding around $620K from a 2019 sale and directed it toward a few properties like that.. especially if you leveraged financing.. you might’ve grown your portfolio’s total value well beyond what many Los Angeles holdings would have delivered over the same period.

Then again, L.A. still has that unique mix of robust demand and limited supply.. from what I’ve heard, you can see impressive long-term gains there if you’re comfortble navigating tenant protections. With so many folks leaving California for places like Phoenix or Austin, is the interest in L.A. truly tapering off, or do you see that classic momentum holding strong? I’d love to hear everyone’s take - especially anyone who made a similar move and can share how things have played out since 2019.

Drue, looking at your family friend’s property, there’s definitely some room to maneuver here. You’ve got a sizable asset with stable tenants, but the monthly overhead is making it feel heavier than it should. I’ve seen situations like this before..one old friend of mine in Austin had a few industrial buildings where the cash flow was decent but not dazzling, and he was itching for a way to ramp things up. He ended up sitting down with a local commercial broker who specialized in warehouse properties. After a few candid conversations, they realized they could negotiate slightly higher rents by offering small improvments..things like better loading dock access or upgrading the security features..turning a so-so cash flow into something much healthier.
When you break down your family friend’s situation, it might help to consider these angles:

• Selling and redeploying capitla could open up opportunities in markets where cash flow is a bit juicier. Places like San Antonio might present more favorable cap rates, from what I read in Forbes recently.
  
• Refinancing could free up equity if today’s loan terms are more attrative, though that depends on current interest rates and the property’s updated value. Sometimes pulling out equity and reinvesting it elsewhere..maybe in a smaller, more agile asset..can give you the cash flow boost you’re after without giving up a solid property.
  
• Improving the property’s current performance by making it more appealing to tenants or tweaking lease structures could give you a nice bump. If the current rents are below market, maybe it’s time for some modest increases, from what I’ve heard many landlords do this gradually. Just be mindful to keep relationships with your tenants strong.
  

I’m curious... if you had to pick just one route right now..sell, refinance, or optimize..where do you think you’d lean, and why?