All Forum Posts by: Ryan York

Nick Anderson sorry for the double post lol. Couldn't find the edit on my phone. Shoot me a pm. I'd like to see if we can help each other somehow. It's nice to hear someone actually ask for what a potential client is looking for and to qualify them. So tired of wholesalers mass emailing their spam "deals of the century."

Nick Anderson Hey Nick.

Joseph Gozlan thanks Joe. Anything you typically try to avoid? Aside from bad locations obviously. We're really looking for value add opportunities. I know things like adding metering and adjusting low rent are somewhat more obvious ways to improve noi. Any tips there?

Jeff B. Thanks for the replies. That's helpful. Is there some metric you would use to consider whether or not the cash flow is sufficient to fix the units as they come vacant? Say you had three units come vacant in the same year. I expect it would be a challenge to have cash flow that could pay for 10-20k of repairs in one year. Would you go through the current leases and see when each one is ending and shoot for cash flow that can pay for that, or would you just collect your cash flow and rehab the units when you can?

Hey Mike, I actually think we're on your mailing list. I'd love to get some apartment leads though.

We've been grinding hard for our first apartment complex. We've been scouring MLS and Loopnet and driving around looking at apartments. Really excited to get into an apartment complex. We're looking primarily at smaller 5-15 unit complexes. Looking for value add like most. What are your top two metrics/qualities you look for in an apartment?

@Jason Young You asked if there was a time frame for the cash out refi. Yes, typically banks will require a 6-12mo seasoning period before they'll loan on the property. Whether you're allowed 6 or 12 depends on the bank. You'd just have to ask. 

As for the rest, I think any strategy you can use to get your capital back out is typically a good thing. Like I said before, any refi on your primary is riskier just because you could potentially be out of a place to live if the worst happens. If you have a family, it's obviously an even bigger risk. 

As for the auctions, I've never had a lot of luck with auctions in my area, but plenty of people go that route. I think you should establish some general requirements like specific cash on cash return numbers, 70% rule, etc and use those to continue to make offers. 

Hey all,

We're super interested in getting into apartments, but I'm struggling on a few things when it comes to the analysis. 

1. When considering work that needs to be done to the property, such as remodeling rooms, should we consider that as upfront money or somehow spread it out in our analysis? I know investors often do a few rooms a year or something like that. Obviously, having an additional 80k in expenses added on to the purchase price makes your cash on cash return and overall ROI look a lot worse. How would I go about factoring that in over say 3 years? Subtract from cash flow maybe??

2. We're looking at a property that would cost us about 600k plus the repairs. We don't have that kind of scratch so we'd need a loan. We would probably put together some private money in addition to a commercial bank loan. Who should I consider approaching first, bank or private money? 

I've attached our current analysis below. It's a work in progress so feel free to pick it apart! 

Any other input would be greatly appreciated as well. 

Jason, I don't believe it matters if you paid cash for your condo. You should be able to do a cash out refi whether you bought with cash or on a loan and paid it down. I'd definitely get in touch with some lenders in your area and talk to them about the cash out refi on the condo. Basically with that strategy, you could buy deals at the auction, fix them up, rent out and six months to a year later, you would cash out refi to get your funds back and repeat, assuming you had the equity available. You may get a better loan on your primary but it's significantly riskier. If something goes bad and you default, you'll be out of a living space. That's something to consider.

@Joe Villeneuve Interested to hear the rest of your thoughts... the taxes and insurance per month is about $234.

I believe his biggest priority is his final "sale" price, with interest included, thus his fear of early payment. 

My biggest concerns are MIRR and not having any money tied up. I don't really care whether the MIRR comes from cash flow or back end resale. Likely, it'll be on the back end resale, otherwise, it would have to be cash flowing like mad to make a huge difference over time.