All Forum Posts by: Steve Olafson

I just bought a small strip center in a very strong location.  It was 57% occupied at the close of escrow.  A good chunk of the vacant space was just leased to an optometrist. 7/11 is one of the tenants in the building. 

I am basically a multi-family investor but could not find any decent apartments to purchase. Everything seems so overpriced these days. 

I may sell off more apartments and move the money to retail.

In two cases there was no money down.  I had a two year contract in which I made a lease payment from the cashflow.  At the end of the contract, I refinanced the properties and paid the agreed upon price plus eight percent.  It was expensive but it was no money down.

The nice thing about the arrangement that I had on these was that if financing was not available, the seller and I went into a pre-arranged contract for deed.  So I actually had 5 years to obtain my own financing.  I did not need it but it was there.

In another case I had to put down 10% initially which went toward the purchase.  The seller carried the loan.  This property had a negative cashflow initially which is why they did the carryback.  Good financing was not available due to the financials.

I sold the property after 2 years and did a double closing.

 Therein lies the rub...  You must be able to tie the property up, put down the earnest money, get your investors, and get your loan.  Much of the work needs to be done before you dd period is over as you need to protect your earnest money.  It is a challenge for sure...

 Yes, jobs are important.  I will NOT do section 8 for other reasons.  I have had many section 8 tenants in the past and had a much higher rate of evictions and many other problems as well.  I know this program works for some people but not for me.  :)

Agreed... And that can change with time.  Builders may see a need for 2br's and end up adding too many.  Demographics can change quickly in some areas as well.  During times of population growth, you can have all kinds of interesting dynamics happen.

I had some apartments in CA that were mostly one bedrooms.  The area began changing with many gay people moving in.  That did wonders for my properties and filled the one bedrooms with high quality renters.  In fact, it did wonders for all of the units in the area.

Hello All,

I have been an apartment investor for many years.  I have made millions and lost millions and made them again.  It is a tough business if you want to take it personally.  :)

I had built up to over 900 units at one point.  About half of those were mine and the other half were with investor money.  I lost the majority of them during the economic crash.  All of my own units were foreclosed on.  I lost one building with investors after a long hard battle. but the remainder of the investor units were able to be salvaged and were actually given decent returns in the end.

I had 500 units of my own that I had refinanced with decent rates at the time. They were leveraged at about 80% LTV which proved to be too high when the downturn happened.

We were hit hard here in AZ.  My rent collections dropped by more than 40% in a short period of time.  Apartment vacancies were much higher than reported at the time.  We went from about 6% vacant to about 25%.  On top of that, many others just were not paying.  The 40% drop was very real across all three of my properties.  I probably could have saved 125 units or so if I would have initially focused on just one property.  I burned through all my reserves real fast and went into a deep vortex.

Anyway, properties got real cheap around here.  I was able to convince a few investors that we needed to buy up some of these zero cap rate deals based on the price per unit.  I was able to buy up about 100 units. 

Prices and rents have not only rebounded but have surpassed the earlier heights in the market.  I have been selling off units recently and have dropped from 170 down to about 75. 

I recently purchased a retail strip mall in one of the very prime locations of our city.  It is difficult to buy multi-family at the prices being asked of them these days.  I can't even find fixers at a decent price.

Anyway, that is my introduction.  It is good to see so many knowledgeable people around a forum.

btw... you place instant biases when you judge as good or not good.  It is much easier when you focus on the issues and how to resolve them.  Keep the personal part out of the equation.  :)

Key in on your phrase "the tenant isn't a good one".  If this means that the tenant is breaking covenants of the lease then you have options.  You must work with them to make them become compliant or evict them based on the issues. 

All this means that you must become familiar with the laws for your jurisdiction or hire someone that is.

I have bought a few deals on a lease with an option to purchase.  Then either exercised the option or sold the property with a double closing.  The seller wanted to know my track record first though.  It was important to them that I was experienced at being able to turn a poor performing property into a strong performer.

I added a pic of one of my properties.  It was removed because the name of the property was on there.  Very strict...  I guess there must be a reason.