All Forum Posts by: Sam Grooms

Depends on what your investment per door is (you should underwrite to a return, not per door income). 

Have you been talking with the owner? That post looks like it's a wholesaler, in which case the $150K is probably net to the seller and wholesaler. If you involve your agent, you're likely paying their commission on top of the $150k.

 Yes, they're:

The Complete Guide to Buying and Selling Apartment Buildings, by Steve Berges

Multifamily Millions, by Dave Lindahl

The Complete Guide to Buying and Selling Apartment Buildings, by Steve Berges

Multifamily Millions, by Dave Lindahl

@Drew Wiard

Not even sold/closed comps? 

I didn't realize you were considering a debt syndication (paying interest), instead of equity. 3% asset management fee will be hard for investors to accept. Maybe you can get away with that with close friends and family, but once you branch out and try to raise money from more sophisticated investors, they might have an issue with that. 

If you're set on not getting reimbursed, which is the route most sponsors go, I would include your up front costs as part of the sponsor's (equity) contribution. You'll be invested in the deal, and the "interest" on those expenses will just go to you. 

Maybe @Ben Leybovich can weigh in, since he owns property in Ohio. What are your thoughts on wall heating units and window ACs, specifically in the Midwest? Those don't work well out here, but perhaps its different in other markets.  

Regarding DSCR, make sure you're calculating this correctly. It's not as simple as T12 or Pro Forma NOI. It'll likely be:

• T3 Net Rental Income
• T12 Other Income
• Pro Forma Insurance
• Pro Forma Payroll
• Pro Forma Property Taxes
• T12 Other Operating Expenses

In regards to property taxes, you don't need to automatically adjust them to 80-90% of your purchase price. It depends on your area. That's the rule for Texas, where they aggressively chase the sale. Other markets, like Phoenix, have laws that prevent that, and you can safely/conservatively underwrite a 5% increase per year during your hold, since that's the statutory limit. 

This website is fairly comprehensive regarding multifamily loan options:

https://www.multifamily.loans/