All Forum Posts by: Robert Musallam

Hi @Jen L. For five units in the bay that have a chance to cash flow, I'd suggest the East Bay. Deals are still possible there, it's close to public transportation and a lot of the renters getting priced out of SF will head there first before they come down to the South Bay.

Let me know if you have any more questions :)

Hey @Ket Pat Welcome to BP! 

Tons of great people and content here to help you get started. I think you'll find a variety of opinions on this topic. Ultimately, what's important is your comfort level. Is it price point or is it proximity? Or is it any one of a hundred other things.

Point is, do your research, figure out what type of investor you want to be, then focus on finding that investment - whether it's in your area or not.

Best of luck and feel free to reach out any time!

Hey @Charmian Wong Welcome to BP! Glad you found it at the right time. I wish I had when I was coming out of college, life would be a lot different for me!

Your question is an interesting one, as many who are graduating now are being buried by student debt. Perhaps @Chris Mason could chime in - he's a super smart lender in the area. How would you counsel a client on student debt in order to invest?

I personally wouldn't pay the student loans off completely before starting to invest but that's me :)

Best of luck and keep us posted on your progress!

@Dr Aaron Bryant Welcome to BP!

Keep us posted on your progress & best of luck to you moving forward!

@Seetha G

Just curious, why wouldn't you sell it as is to a retail buyer anyways? Why must it go to an investor? 

@Vincent Ballew Thanks for that great post! Very informative. Glad to see you've learned from your earlier mistakes and most importantly found BP!

As for more than 4 units, I'd say a few things:

1. Find a commercial broker and have them really explain the local RE market for these types of units. The tenants are vastly different than your standard SFR tenant.

2. Know your numbers really well. There are more expenses related to these types of properties, so make sure you know what these additional expenses are and account for them.

3. Find local commercial lenders and ask them what their loan to value amounts are. Basically, when you go above 4 units, the lender will tell you what the down payment has to be for the property. You cannot assume it will automatically be a 20-25% down payment.

4. Find an inspector that specializes in larger multis - again, it's a different animal.

5. If the unit you're looking to buy is being managed by a company, interview the company to see if you'd like to keep them on or if you'll be transferring. Do this before you close escrow.

6. Figure out a cash flow strategy. I like to acquire units that will eventually net me $200 a door once I make the appropriate upgrades. What constitutes a good deal in your mind now? Does it logically translate to larger units, or does your idea of a deal need to be modified?

Hope that helps...Feel free to ask me any more questions.

Hey @Janae Lacey I definitely try to work with investors - I certainly prefer it more than retail. It's not as easy in this part of the world since the deals here aren't what the average BP member would be (a) able to spend or (b) would qualify as a deal in their minds.

@Cody Zimmer My list of questions: 

1. How do you find/source your deals?

2. How do determine what parts of the unit will be kept (not upgraded) or upgraded (Think roof, plumbing, electrical).

3. What is your leasing criteria? If buying turnkey, they'll lease the unit for you. Make sure they do as good a job as you would.

4. Who do you recommend for property management? Why?

5. Who do you recommend for inspections? Why?

6. Do you have a warranty on the property? If so, how long?

7. What class neighborhoods are your properties located in?

Perhaps my friend/business partner @Travis Limbocker could chime in with others I may have forgotten to list here.

The reason I'd look for turnkey is because the amount of work required to run a rehab is extensive. You'd have to have A LOT of trust in the contractor you're working with - and that's hard for some people to do even on a local job they can drive by daily. So, while BRRRR is great for obvious reasons, rehabbing a property out of your area can make it a non-worthwhile strategy.

Not saying it's impossible though :)

As for local stuff, depends on what your current situation is. San Bruno is an interesting place. It's not nearly as expensive as the other areas around the Peninsula and it has a ton of Multi Family housing. If I had 80k, I'd probably analyze how much I'm paying in rent vs how much I could expect to net in cash flow after buying a duplex (or larger) somewhere else. If I thought I could buy a duplex locally using a less than 20% down loan, & keep my effective mortgage payment close to what my rent is and own two units in the Bay Area, I'd go that route. 

But if you've got a sweet deal on your rent and you're comfortable living there for the foreseeable future, getting some cash flow in your pocket isn't the worst idea. 

Hey @Jeff Matlock Welcome to BP!

@Samuel Persson on Realtor(.)com, choose filter by apartment. You'll find a few there. Or go to Loopnet and search for multifamily housing. 

@Vandana Rao See above response on 5+ unit searches

In regards to boots on the ground, do you have an area you're focusing on investing in? If not, start there. Then use the power of BP to connect with the boots on the ground. 

@Cody Zimmer You don't necessarily need a partner. If you're really interested in investing out of state, you'd probably do well to find a turnkey provider on BP and interview them. Ask them why their area is the right place for you to invest. Ask them a bunch of questions about their process. Ask other BP members about their experience with said company. Or ask the company for references and actually call the references. 

Reliably investing out of state requires you to do due diligence much like buying locally. And it requires you to manage the people that you've hired to manage your properties. It's not entirely passive. And to be clear, there's so much more than can be written here.

Feel free to ask me any questions you all have, happy to answer what I can.