All Forum Posts by: Tom O.

I'm about to save you $14,970. Go take $30 and buy David Lindahl's brilliant book Multi-Unit Millions. There. Now you have a coach. If you have any questions, you can hit me up anytime. GRATIS. I am not rude but I do get a little cranky sometimes. But would you put up with a cranky coach who is free?

I'm not the greatest expert here. I'm sure there's others who are better. I'm at 4 buildings, 25 doors.

3 Votes

Los Angeles County, California

Quote from @David P.:

Quote from @Sam Yin:

@Bruce Woodruff

Good morning Bruce. Lots of great points and opinions already. But I'll chime in... from a SoCal perspective...

I think the market is still hot! It's predominately a sellers market still. Although I mainly concentrate on small multifamily, I can tell you that it is HOT!!! It flies off the shelf if it gets listed at any reasonable price. However, most times it never gets listed because the demand is so hot that the agents get it sold with only a few calls.

The last 5 out of 7 deals I closed were all off market. And I had to jump on it because I knew if people got wind, I would lose them. They were all small multifamily, 6 to 20 unit buildings.

My most recent deal, to be closed next week, is also off market. It has a blended COC of 7.5, CAP of about 7.5, and GRM of about 8. Total price was originally about 2M, but I negotiated to 1.85M with a promise of no trades. Its 14 homes and one vacant lot, spans 1.5 blocks, and unit mix from studios to 4 bedrooms.

I am always looking and negotiating and I can tell you that the market here is so competitive that you better have funding at a moments notice. There is no sign os slowing down, only limited inventory. I was negotiating a 32 unit and was almost there when the word got out. Suddenly all kinds of investors jumped it to snatch it up.

I feel that the market will vary from region to region. However, the major markets might have seen their bottom, or close to bottom... with the stagnant prices. Now, there may be a good possibility that it will begin another in up in 2024. I do not have any concrete evidence, just a gutt feeling based on experience.

Sam, I'm in Southern California too and invest mostly small multi family 1-4 units. Recently try to bid a triplex off MLS that was priced about 100k under value. I made an offer with the listing agent but still got beat by 2 cash offers at 1.2 mil. Curious though...how are you cash flowing with these high interest rates? I'm currently working a deal on a offmarket duplex in long beach but the numbers look terrible..almost negative 4k/month cash flow after all expenses with the rate and low rents. Both factors can be corrected over time but itll be a painful slow process. The rate portion we can't control. The deal itself is awesome at 360/sqft where the area goes for 450-500/sqft so that's the main reason I still want to pursue.

Folks:

They are not cashflowing at these rates. These investors are sitting on cash and need to park it in something. So they don't care about cash flow because they don't have mortgages.

0 Votes

Phoenix, Arizona

Owner should pay the water bill.

0 Votes

Baltimore, Maryland

https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2023_code...

HUD publishes Fair Market Rents for every zip code in the country. It depends on the area and can vary widely.

1 Vote

If you don't have a contractor you can ask this or pay to get you an estimate or figure it out yourself maybe you're in the wrong business?

0 Votes

Cleveland, Ohio

Much of the advantage and value of RE investing is the leverage you get when you invest with a loan. So I don't see the value in this but I don't have the cash to buy anything right now anyway. But for me, leverage is king. I have four buildings with 25 units. If I had owned everything without loans I would own exactly 2 buildings right now of 9 units.

0 Votes

Cleveland, Ohio

I'm wondering about their notes as well. Seems too good to be true.

0 Votes

@Konstantin Ginzburg

So the LLC protection from liability varies from jurisdiction to jurisdiction. I have personally seen judges go right through corporations right through LLCs is if they didn't exist. Even when there was also the protection of the workers compensation act. Meaning an employee suing his employers LLC.

But anyway I keep telling everyone to buy more insurance. An umbrella of for a million dollars cost $300. That's pretty good protection.

I can also personally attest that personal injury lawyers don't want to own buildings. They don't want to pierce corporate veils and go through and find landlords personal assets. They don't want to do all that crap.

They much prefer insurance adjusters writing checks.

One last point that nobody's mentions. And most jurisdictions and certainly mine. If you self-manage you will not get the protection from an LLC. You are the manager. You will always be personally liable for your own activities.

23 LLCs will not protect you from your own actions with respect to the building. If you want the LLC protection, you're going to have to hire outside management. And don't ever visit the property because that's an inspection where you should have figured out what was wrong and fixed it before the tenant or whoever got injured. You see?

But I am in a very plaintiff friendly state. YRMV.

2 Votes

1. Don't buy single family homes. Let people who want to live in them buy those.

2. Buy multi-unit. They cash flow better. Mo doors; Mo Money.

1 Vote

Saint Petersburg, Florida

NY is rough man. You need an attorney. If you're going to do it yourself, google elsewhere. There's tons of guides on how to do it.

One tip: most holdover clauses raise the rent significantly if they stay and you invoke the "holdover clause" by ending their tenancy if that's how your lease is set up to do so.

1 Vote

Upstate New York, New York

All Forum Posts by: Tom O.

Tom O. has started 11 posts and replied 210 times.

Post: I dont need a Rude coach

Post: Anyone have an idea where the market is headed?

Post: Baltimore - a path to never-ending pain

Post: I have a real estate mentor and he told me this, is it true?

Post: inspection report - estimate needed

Post: Buying a turnkey in cash

Post: Norada capital investment

Post: Why do people use LLC for "buy & hold" rentals that have mortgages?

Post: How to find Cash flowing properties - What am I missing?

Post: Evicting a Holdover Tenant