All Forum Posts by: Ryan Evans

Have you talked to any lenders yet? I've never even used traditional lending, but I've found that talking to lenders is a great way to learn the basics. If it's your first deal and you want to take on a project, you might be well suited to do a 203k loan or something similar. Getting your docs together is a learning experience in itself. 

Plus, you'll get a lot further with agents/potential mentors showing that you're taking the right steps, even if it's just the basics. 

@Rob Gillespie that should be the default response for the endless new BP threads asking for property management recommendations in Cleveland! hah

I do a lot of what you're talking about in Cleveland in a very informal sense. I'm always talking/meeting with other investors looking at the area to give opinions, do walkthroughs, rehab estimates, and impartial opinions on properties. I've helped a few get stabilized as well. Sometimes for a fee, sometimes for a partnership opportunity. It's easy to make a win-win in real estate, so you can be pretty creative. 

Earlier this year I moved to the area specifically to be able to spend more time on the ground since everything is just easier. Seems everyone else needs that kind of resource as well since so many wholesalers, brokers, PM's, contractors, etc., will tell the out of state people whatever they want to hear to get a deal done.  

Just for future reference, certain lenders will do preappraisals so you can know if your ARV is in the right range. If it checks out then you can go into the deal with a lot more confidence knowing you've got someone to finance out on the back end.

What kind of deal are you looking at? Depending on if it's a flip, rent-ready, commercial vs residential, etc, that will determine to some extent who you need to talk to. Hard money lenders and local banks will have very different loan products. 

If you do a search for it there are a few threads on this topic floating around BP with quite a few names listed. 

How good of a job do they do managing the property? Finding a reputable PM is by far the most common issue investors face here based on the conversations I have on the subject (which is a lot), so you're going to be paying a premium for anyone decent, regardless. I can confidently say 9 out of 10 people I meet are not happy with their property managers here and are looking for someone else, so I encourage you to just keep that in mind if you're looking to make a switch. A bad PM can do a lot more damage to your business than a few annoying fees. 

Not to sound harsh, but I'd ease up on the Grant Cardone (only buy 16+ unit) youtube videos and learn the basics. Do you think any broker will take you seriously when you say you're looking for 16+ units literally anywhere in the country and you have no money or financing lined up? 

It might help to find some commercial listings that have full financial breakdowns. That will give you a better understanding of what bills to expect. Though, it's just a starting point. You may need to handle certain parts of the operation differently, such as utilities, cleaning of common areas, pest control, dumpsters vs garbage cans, maintaining a boiler vs furnaces, striping a parking lot, etc. 

Commercial contractors work on different terms and maintenance schedules are different as well. And at a certain point in multifamily it makes sense to have onsite management. 

You'll never be ready, but you can mitigate risks and go in informed. You can read every book on how to ride a bike, but you'll never figure it out until you give it a try. It's the same thing with real estate. 

Plus, have you ever heard someone say they wish they had waited longer to invest in real estate? My point exactly :) 

If you're already working with an attorney, I'd ask them this question rather than leaning on BP for advice. But generally speaking, people like that don't change. They'll probably string you along and you'll just have to evict later, anyway. You'll make your money back by raising the value and hopefully the rents, but every day they are in there you can't do either of those things.