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All Forum Posts by: Sam Grooms

Sam Grooms has started 13 posts and replied 557 times.

Post: Investment criteria for buying Apartment Buildings

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919
Originally posted by @David de Luna:

Tapping into this impressive braintrust, can someone show me what a 10 year IRR formula looks like? I am familiar with Excel, just want to make sure I build the formula correctly.,

Once you have your 10-YR Pro Forma, and your cash flow amounts for each year, you simply use the formula "=IRR(A1:K1)". A1 would be your cash outflow at acquisition, then the nine cells in B1 to J1 would be your first 9 years of cash flow. Cell K1 in this example would be your cash flow in year 10, plus cash received at closing on your exit.

I haven't heard of people buying large multifamily based on the 1% rule. 

Post: Investment criteria for buying Apartment Buildings

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919
Originally posted by @Jamie Burns:

Great question @Matthew Shay, my partner and I are trying to narrow down our criteria right now as well. I'm curious as to how hard it will be to BRRRRR multi-family and if there is a point that a property becomes too big to make it possible. 

Good info @Sam Grooms!

Absolutely not. Groups are using the BRRR method on 300+ unit syndicated deals.

Post: COOLEST Multi-Family Property in DC - Need some opinions

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

Is it in an Opportunity Zone?

Post: Investment criteria for buying Apartment Buildings

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

14% 10-year IRR. 8% average 10-year COC (excluding capital events).

That's it, really. Obviously you want a 3-4% bump on a 5-year IRR. As for funding, private partners for equity, commercial lenders for debt. We buy C Class value-add properties.

Post: Recourse for improper disclosure??

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

Do you have the claim in writing that the seller had no security deposits?

Both of these should have come up during due diligence. First, the rent amounts should have been caught during your lease audit. Second, anytime a seller claims there's no deposit, you need to confirm that with the tenant before closing. Usually the seller will have the tenants sign a letter saying that there's no security deposit. 

Originally posted by @Ivan Barratt:

 I don't think that's true. Most properties have non-operating expenses. 

Post: Real Estate Attorney Referral Needed in Phoenix, AZ

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

I'd recommend Nearhood Law Offices in Scottsdale. We've used them for property taxes, but they also handle litigation. In fact, they convinced us litigation wasn't the answer on an issue and saved us some money. 

Post: When can I ask a seller for numbers on a property?

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

What Chase said. If they're selling the property, you should immediately get a T12 and Rent Roll.

Post: How to start a syndicate?

Sam GroomsPosted
  • Investor
  • Phoenix, AZ
  • Posts 583
  • Votes 919

Reach out to Jillian Sidoti at https://www.crowdfundinglawyers.net/about/jillian-sidoti-esq/ and she can walk you through setting up your syndicate.