All Forum Posts by: Todd Kruger

Mike, The town this property is located in has a small population.  The median household income is $46,364 and $35,492 per renter occupied unit.  The reason I liked this investment is because the affordability and demographics.  This is a very nice community for the town and I consider it a B property given the competition more so than our typical class measures.  B or C property is all relative and doesn't matter so much to me.  Although there is not a tremendous value added opportunity, it is a very well maintained, stable complex with a very strong history.  There is additional income of $50/ washer/dryer rental that I have 16 so far and plan on adding more for additional income.

Vacancy rates are figured at 5% as are my cap x and my employees are paid $15/hr. and are both solid with good 5+ years of experience.  This town just has a very low cost of living.

@Ivan Barratt

No, not my first deal. I have been an investor for 19+ years and have flipped nearly 1,100 homes. I have other long term holds such as this but all in smaller deals-mostly single family homes.

@Alina Trigub

Correct, I own this property in a LLC specific for this investment. A reverse syndication was probably misstated. I guess it is more like a syndication after the fact.

I just purchased a 52 Unit apartment complex for $1,975,000. I put 20% cash down and got a 7 year fixed rate of 4.55% amortized over 25 years from my bank with .25 origination and receive approx. net cash flow of $6,500/monthly. This complex is about 3.5 hours away from my home and has (2) employees: On site Property Manager & and on site Maintenance person. The complex is a B type property in a smaller town (40K) with an Air Force bace. There is a very strong rental history and always fully occupied with a waiting list. The property generates approx 19% cash on cash ROI and 9.23% CAP rate. The Monthly gross income is $26k and expenses just under $19k. Rents are about 10% under market and have room form increases as units turn.

My question:  Does anyone do a sort of reverse syndication?  Selling off a portion of my existing deal to get back my $400k cash and repeating the same model over & over?  Should I even be considering this if I don't necessarily need the cash back to move forward on my next purchase?  Should I just own & operate as was my original plan or is there another more lucrative avenue syndicating to get my $400k back and having $0 cash in the deal?  THANKS BP!

Quan, I have about 65 doors and have a strict policy against dogs or cats with the exception of a service dog.  I have found that allowing pets is a recipe for a headache.  They will eventually cost you money at some point in the process.  The additional pet deposit and/or rent is never enough to cover the damage.  I am a pet lover and have animals myself, I just cannot rely on others to be responsible enough to allow them.  9 out of 10 animal owners are great and responsible but it only takes 1 to make you regret it.  

@Mark Robert

I have purchased many homes thru Hubzu over the years. You have nothing to worry about by placing a new lock on and securing the property.

The seller could care less about the home and you will never be able to reach them no matter how hard you try or nicely you ask.

Secure your future investment without hesitation!

@Andrew Taylor

It stings and we have all been there at one time or another! I am a 20+ year real estate broker and can say not every partnership is a good fit. If you do not feel like your Broker is giving you the attention and respect you need and deserve, terminate the listing immediately.

Find the best broker in your market and develop a long term business relationship that is a win/win situation. A real estate Broker is a very important part of your team if you are flipping homes.

Best of luck!

@Todd Kruger

Thank you @Jaysen Medhurst for your advise. I ended up listing my house for sale for all the money at $195k and have it under contract for $193k closing in 30 days.

I will net about $50k profit and RE-deposit about $180k into my self directed 401k that I can re-deploy at a much greater return.

I appreciate your advise! Todd

@Jaysen Medhurst

I do all the above and everything I can. I will flip another 80-85 homes this year and have flipped over 1k now in my career.

I am trying to build up my rental portfolio and when I come across a SF home like this one I have been looking to hold more this year. This is in a great, stable area and the neighborhood is about 15 years old with a park and great schools.

I am looking into more multi family lately in a way to diversify in preparation of the pending softening on all markets and any down turn that seems like is the consensus.

I have about $1.3M of my 401k in hard money lending deals to other “flippers” & real estate brokers in my area etc.

@Jaysen Medhurst

Jayden, thank you for your response. My office manages my portfolio and this is no added cost to me so I did not place property management in my equation. In addition, I will be able to get a 24 month minimum lease without any problem therefore I placed my vacancy rate very low as well.

Yes my cash in cash return is lower but I also factor in appreciation that adds to my willingness to keep this long term.

I have about $500k in idle cash in my 401k and finding viable deals is more and more difficult. So another $175k just compounds my cash position and need to spend.

That being said, sounds like you would still sell this asset.