All Forum Posts by: Richard Libutti

@Stephanie Barthelemy

Not trying to discourage you, as investing from afar can be done, but would be better suited to help with insight as to what your goals are.

I generally advise against investing from afar because for me, real estate is hands on in so many ways.However, I do have several friends that are successful investing remotely...

@Kishun Barker

There are a lot of factors in play when assessing...Risk tolerance, overall goals as it relates to growth, etc.

Personally, I own a 4 unit, 3 unit, and duplex in Miami...all without mortgages. I’m 35 and have friends that are opposite of me in their approach as age is a factor too. One has 150+ units at 50ltv with a property management office, etc. and the other has around 80-100 units as well but is highly leveraged and he manages the easy buildings himself, while outsourcing on the other buildings.

I was able to drop windstorm (hurricane) insurance this year due to a 70% premium jump...saving close to $10,000. My net income is already good due to owning without mortgages, similar to my buddy with ~80 units with less headaches. He will, in 30 years, blow by me in terms of income, but I always have the ability to leverage too...

@Christopher Smith

As an outsider to your business, with a law degree, and properties of my own, I will disagree.

I’m not going to assume and get into nuisances, but there’s certainly a reason behind protecting your investments (legally speaking). Think of it as added insurance, etc., but this is of course on a per case basis.

Typically you can have one LLC for all of your properties, if ownership interests are the same, but again, everyone's situation is different.

The best advice I can proffer is to check with professionals in your state, as sweeping generalizations here can be incorrect.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Miami.

Purchase price: $235,000
Cash invested: $10,000

Tri-plex, all separate meters, no house electric. Separate yards - duplex and single standing unit.

What made you interested in investing in this type of deal?

The fact that it was priced well, each unit has separate water meters, and there is no house electric making overhead low.

How did you find this deal and how did you negotiate it?

Listing on the MLS. Came into the deal without a broker, and put commissions back into the deal. Would have offered listing agent the commission if needed to get the deal done. Also got a credit for $5,000 for a unit that was not up to par.

How did you finance this deal?

Paid cash.

How did you add value to the deal?

Paint on the outside, and got a tenant in at $1,300/mo from Section 8.

Lessons learned? Challenges?

Have an old tenant that has recently stopped paying. Lost access to bank acct.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

N/A

Hey there, 

My name is Richard and I have been in Denver for about 1 1/2 years, by way of Miami, Florida. I have multifamily properties in Miami, and am looking to expand here. With that being said, the multifamily scene here has not gotten my attention, mainly due to low returns, hence little to no excitement or upside to move forward now.

As for why I am here and as the title says, I am exploring motel/hotel conversions to multifamily/micro units. These would be ideally targeting tenants with Section 8 vouchers, although I would be happy to explore other tenant bases (students, employee classes...i.e. pilots etc.). 

I have done some research, including local assistance, tax benefits, etc., but haven't quite pushed further as inventory for motels seems limited. 

In any event, figured I would introduce myself, and get my vision in front of some local people. If anyone has any experience in the area, or could direct me to contractors, brokers, etc. that would be greatly appreciated. 

Thanks, 

Richard 

@Juan Pridgen I am not well versed in the Denver market, but am looking to get in as well. With that being said, I think it would be difficult to offer any guidance without knowing what success looks like in your eyes? 

Biggest possible returns? 

Stability? 

Limited Involvement? 

Etc.

Share your thoughts on what you're looking to accomplish, budget, etc. and I think it would really help readers in giving you guidance. 

Richard

@Travis Oneill Section 8 pays pretty well, ~$1,300/mo for a 1bd/1ba. Dealing with them and their tenants is another story...haha. 

Units can be had for around 100k/door, but keep in mind expenses (taxes & insurance) in South Fl aren't cheap. 

I average $2,800 on my 4-plex. Miami, Section 8, no mortgage. 

@Jason M. Got it...I am in agreement that it is important to just get in! My views are that misstepping +/-10% on your first deal is no biggie (law school loans make that look like peanuts). 

I thought I overpaid on my first deal, but ended up being very lucrative. Since then I haven't worried too much about price, so long is the property did what I wanted (cash flowed). I am flexible when buying, if the property is a "real" building with good flow, separate meters, etc. 

I mention all of this though as many new investors need that slight equity to make things work for them, and I believe now would be a good time to wait a few months to see where the country lands. I just can't see prices rising within the next 6-12 months... 

Interested to understand what the incentive is behind buying now. I understand historically low interest rates, but also see historically low returns and historically high volatility. 

My thoughts are to hold off for 6-18 months to see what the repercussions of Covid and subsequent unemployment look like. Rates are likely to rise, but this is usually a slow process. Additionally, the qualified buyer pool is likely to shrink, putting qualified buyers in a good position.