All Forum Posts by: Rodney Robinson

@Andrey Y. You are right. As you said, active investing is not for everyone. Passive investing in multifamily syndications allows for one to participate in the scalability of the business without taking an active role. This method of investments is likely most fitting for most people. For those who have single families, as someone stated, the two are not mutually exclusive: you can grow and manage your single family portfolio and invest passively in multifamily. For those who have not yet passively invested, it may take the headache out of real estate investing and can give you your time and sanity back, as long as you choose the right operator. Passive investing in multifamily deals allows many working professionals or those who value free time to grow their wealth through real estate without active involvement.

One year later, here is a short update. Because of the updates to the kitchen and bathrooms, the property is valued at $155k, an increase of over 34%. The tenants have renewed and the property continues to cash flow $400 monthly. On my original basis of $33k ($25k downpayment plus $8k in rehab), that is a cash on cash return of around 14% annually. Last month, the tenants renewed for another year.

Since then, my family and I have moved out of our primary residence into a new home, and rented that place as well. For a home we only put $1k down that was originally worth $130k, it cash flows around $200 monthly. Because it is now worth $200k, I am pulling out around $45k through a refinance (because of the lower interest rate, 3.5% locked in yesterday, my mortgage will only $50-$60 more per month).

From a year ago, I went from none to two rentals. Certainly a lot has happened in a short time and look forward to scaling as I focus on multifamily.

@Sam Usman also remember that the advertised going in cap rate may not be the same as the cap rate you achieve after value add and immediately improving operations. A 7.5 could be more like 8 to 9% once you improve rent collection, turn units, fire the landscaper, get a new pm, etc. You have to see what hidden or untapped value the property has. In other words, you may know, but in case you are, do not turn away from the subject property just because of the advertised cap rate.

Also, in addition to the advice about looking at smaller apartments to avoid the competition in the DFW area, have you checked out sub markets outside of that area? Hope this helps.

@Yonah Weiss I have a degree in marketing and minor in economics. After spending 10 years in corporate America within supply chain management, I get farther from my college days and become less able to assess the impact of my degree. I do, however, believe that any college degree can build the foundation for learning and self value needed to be successful in real estate.

Specifically for me, my marketing courses were very teamwork based and we did many presentations, constantly socializing, going through the teamwork formation and problem solving process and trusting each other to follow through as working on projects for the classes. I think the parallels to real estate are apparent.

@David Bell People are moving to places such as Florida, where the climate is warmer. I am seeing that specific areas in Florida, such as Brevard county, are experiencing population growth from those moving from other areas, particularly the north.

@Matt Aquino others below provide great advice on resources to read. 8-12 could be too small to syndicate, given the Lowe cash flow and need to pay investors their minimum returns. However, for smaller multifamilies ( less than 30 units) there are other ways to get in, such as partnerships or seller financing.

@Ryan Fenton great question and it is an awesome place to be to have money to invest. Are you interested primarily in actively or passively investing? I agree and my answer for multifamily would be the same. If you are considering large multifamilies (30+ units) you could passively invest in multifamily deals as a limited partner or begin building a network to sponsor apartment deals.

@Ryan Guffey awesome! Get some wins under your belt.

@Ryan Guffey getting a simple buy and hold rental could be a good start and may help ignite our shape your desires, goals and time commitment. After doing my first rental, I learned a lot about my goals and willingness to commit the time. In my case, my strategy is buy and hold, and I am committed to the time, but want more results for that time, so I chose to focus on multifamily. If you ultimately decide that your time is better spent other places, you can still participate in growing wealth through real estate as a passive investor.

In summary. I believe that if you take the first step, you’ll then refine your desires and commitment based on what you learn and experience from that first deal.

@Ellie Perlman Thanks for posting this. It is a good set of guidelines for those who are altogether fearful of what impacts COVID has on housing. While not a great state that we are in, people will always need housing and multifamilies will continue to exist. For buyers, the more conservative underwriting approach that you outlined helps to mitigate those unknowns.

I also believe that even in those areas of high-infection rates, while there may be pain from from loss of employment in the short term, housing will still be needed. These are also likely C class areas which happen to be least impacted (in terms of vacancy rate) during times of recession compared to the higher classes. Perhaps these areas present a good opportunity for those who can manage through the near-term tough times with tenants.