All Forum Posts by: Jeff G.

@Justin Goodin, right now I'm everything squared away for the pre-approvals. Basically, I'm in "hurry up and wait" mode.

 Can you explain that a bit more? What's approaches have you used to build your network?

@Erickson Sainval when you say "partner" what form does that usually take? Let's be conservative and say I only have the liquidity piece for the down payment and reserves. How might this work?

@Taylor L., can you give me some idea of what you mean by "net worth and liquidity requirements?" When do you think the banks will stop asking for COVID reserves?

I've got my eyes on 2-3 apartment complexes on LoopNet that have made it past my BS filter. These all have a unit count in the high teens or low twenties. I have some specific targets in mind for cash flow and cap rate. Besides that "numbers first" mindset, I'm kind of out of my league.

My gut says I shouldn't move on these specific properties, because they're in states that are losing population and none of them are in the best part of town. So, I'm starting to look for similar properties in other states that are doing better economically. Bearing in mind that this will be my first acquisition, what do I need to know and do to get all my ducks in a row? I don't want to waste anybody's time.

Right now, I'm reading David Greene's book Long-Distance Real Estate Investing but I'm not sure that's going to cover all of my bases. I read a different book specifically about apartment investing several years ago, I think it was Crushing It in Apartments and Commercial Real Estate, but to be honest I need to re-read it.

The essence of what I'm getting from Greene's book and what I remember of the apartment book is "build a team and systematize everything." Okay, noted. But, I'm struggling to answer more basic questions:

* I do have a down payment for a property this size, but I'm fuzzy on the exact percentage the bank is going to expect. Is it 20 or 25% down?
* How many months worth of expenses do I need to tack onto that to make my numbers work?
* Is there anything like a pre-qualification phase like there is with a residential mortgage?
* For the more experienced among you, what is an instant deal breaker even if everything looks good on paper?
* If I identify a possible deal, is it bad form to reach out to the property manager directly and ask about the property's pain points?
* Are there any regulatory burdens I need to be aware of for properties of this size?
* What tips do you have for building a team and systematizing stuff.
* Where do I go other than LoopNet to shop for apartment buildings?

I'm keenly aware of how little I know and how badly I could hurt myself by acquiring the wrong "deal." Any direction on how to get started down this path would be very appreciated.

This is more for heading future problems off at the pass than an exact match to your current situation...

I'm not a lawyer. When you reach out to appropriate legal counsel, ask about adding a "joint and several liability clause" to your lease contract. In a nutshell my laymen's understanding is: you the landlord can pursue payment for missing rent and/or other money damages against all NAMED co-tenants without regard for proportionality if someone stops paying. 

This can prove very helpful in a multiple tenancy situation, if the individual who bears the brunt of the expenses in a room-mate situation suddenly leaves. You'd be surprised how many people want to renegotiate rent downward or deflect liability when a multi-tenancy situation goes bad.

Just out of curiosity, has anyone here tried the cash for keys approach and had success?

@Spencer Gray, how would your recommend building relationships with out of state brokers then? Obviously, coffee isn't an option long distance.

I live in one of those "if it moves, tax it" kind of states. For homes in the thousand or so square foot range, it's quite common to pay more per month on your property taxes than your actual mortgage. Also, the population is starting to shrink just a bit. I think it's mostly the taxes and cost of living, but I expect this trend to accelerate as the older segments of the population migrate to Florida and the like. So, I think it's adventitious for me to try to buy in a state that is increasing in population or at least mostly holding steady.

So, that's criteria one. My next criteria is a three bedroom house that can accommodate a fourth bedroom, most likely in the basement. Section 8 payouts are tied to family size and bedroom count. I'm attracted to the idea of buying a three bedroom property, adding a fully legit basement bedroom, and placing a Section 8 tenant in the property who has a four bedroom voucher. In many markets, this seems to virtually guarantee above market rent.

All that said, markets shift. I want to be absolutely sure any prospective properties would cash-flow at market rates. This will keep me flexible with respect to my tenant pool.

Fully finishing a basement and adding a bedroom strikes me as a full gut rehab in miniature. That may mean it would be challenging first project, especially remotely. Everything has a learning curve, even real estate. I'm very open to suggestions as to how I can wrap my head around this and which States work well for this kind of thing.

These would definitely be a BRRRR acquisitions. Is anyone here doing this kind of thing remotely at this level? Was it your first (or a very early) project? What's the best way to put a plan together given the current, relatively frozen, state of the market?

Not yet I haven't. A readable version of the ADA requirements would be nice. I'm sure it will drive up any rehab costs. With the right property, I wouldn't expect the added cost burden to be enormous.

I'm not even sure what government program pays the rent on behalf of the tenant. I could always be wrong, but I'm reasonably certain it's not part of Section 8 (low income) or Section 202 (elderly). 

My guess is it's called something completely non-intuitive which makes it hard to find using Google.