All Forum Posts by: Tony Castronovo

@Cody DeLong I edited my original post with a couple of photos (one before and one after).  My link got edited out by the BP moderator.  But happy to share the website if you want to PM me.  I can also post a few more photos of the before shots as we don't market that on our site ha ha.

@Cody L. the property is in Bryan / College Station, TX.  I am not sure you are a fan of smaller sub markets (just a hunch from other posts).  But this property checked a number of our boxes and we feel pretty bullish on BCS.

Good to hear your positive experience @Mary M.

I started in SFH @Christopher Fawls.  Sold my portfolio at the beginning of this year (one buyer) and 1031'd into my first MF property.  Learning a lot!

Not sure I have updated y'all in awhile, so here goes.

- Closed on the property at the beginning of August 2018

- Completed exterior and mechanical improvements, including new TPO roof, new HVAC systems, several concrete balcony/landing replacements, and new paint (HVAC systems and roof were at the end of their useful life.  Negotiated 50% of the combined costs at purchase).

- Completed 7 of 20 interior renovations, with 2 more planned to be completed at the end of the month.

- Cleaned up the property, including overgrown bushes and trash.

- Removed all undesirable tenants.  All tenants were/are on month-to-month leases.  We can remove any tenant with just a 30-day notice.  We did have to evict one tenant who just would not leave.

- Placed our first tenant this month into one of our newly renovated units.  $200/month increase from the prior rents.

We originally planned to take about 15-18 months to renovate the property, keeping occupancy high during the process.  But a few things we learned right off the bat:

- Repairs and maintenance were killing us as the previous owner never did a thing and was the "king of cob" as the tenants pointed out.

- We had a rough crowd at the community.  Tons of smokers, loitering, cussing in public, and even a couple situations that made the local news (tenant through a TV off the second-story balcony, then the next week drove his car into one of our contractors trucks and threatened him with physical violence...4 police cars on the scene).

- New desirable tenants do not want to move into an apartment complex and pay market rents when it's still a dump

So we accelerated the entire process.  The downside is that occupancy is really low right now.  But our loan has 12 months interest only, so we figure it's a little easier to manage the lower occupancy now, get the place cleaned up, and hopefully see that proverbial hockey stick kick in soon.  Our big goal now is to fill units....but we are at the slow time of the year.  We may need to drop our rents a bit until we get past the winter months.

PM me if you'd like a link to our website to check out some of the finished units.  If interested I can share some of the before photos as this place was a train wreck, including a hoarder who took two full size dumpsters to clean out trash from her unit. Ceiling was caved in due to roof leaks, etc.

Here are a couple teaser before/after photos:

I got 5.5% on our 20-unit MF purchase, 20-year amortization (normally 25% but because of the property age they wanted to go with a 20-yr), 80% LTV, 5-year fixed, 12-month interest only. But this was 4 months ago. The loan included a portion of the interior rehabs (80% of what we forecasted for the first 12 months). We used a local bank (property is in Bryan / College Station).

I'm still reluctant.  I have a 20-unit complex 1 mile from Texas A&M University.  The university employs 17,000 people and there are several other large employers in the area.  I may not turn away a college student, but right now I am not actively marketing to them.  I may become more open to it.

Yes, gotta keep the chin up.  Before closing on my first property I put in over 20 offers, looked at about 75 properties, and analyzed many more.  Honestly, if that is how every property would have gone I am not sure it's a sustainable business model.  And thankfully, I started getting better at finding deals.

Not sure what price point you are looking at. I'm pretty sure you can find properties requiring $30k rehab in the $160-180k ARV range. Have you looked in Williamsburg Colony neighborhood?

Morton Ranch is Katy, which is a highly regarded suburb of Houston. Katy schools are highly coveted. That said, there are 8 high schools in the Katy area. Morton Ranch is not in the top echelon but considered “good”.  I have not researched statistics but believe crime is rather low.  Katy north of I-10 is more of a rental market. South of I-10 (e.g. Cinco Ranch) will be higher end communities (generally) and better schools.

I would buy a rental in the Morton Ranch area. 

I've worked with Chris Moore on a few deals and would recommend him.  I would also suggest Spirit of TX Bank, Prosperity, and Lonestar Bank.  Extraco Bank was also great to work with but not sure if they loan on Houston properties (they are primarily Central TX from what I understand).