All Forum Posts by: Tony Tonev

I have a really interesting opportunity to buy an 11 unit multi-family in Noblesville, which is a suburb or Indianapolis. Here's the listing https://matrix.miborblc.com/Matrix/Public/Portal.a.... Originally, it was listed for 950k, the price was dropped to 799k, I offered 550k, and the seller accepted. One finished, I calculate it would be worth 1.2 M at a 8% cap rate, which is typical for the area. Apparently, he put 650k of his own money into it and has been working on it for the past 1.5 years, but he ran out of money and needs to sell to pay his debts. It still needs a lot of work to complete, and I don't have experience with rehabs, so I'm not sure if this is a fantastic opportunity or a huge mistake yet... I will go there in person to supervise the effort, but I feel like I don't even know what I don't know, and I need someone experienced with these types projects to guide me. One idea I have is to give away 5% equity to someone with experience to come in on the project and help see it through completion. One bridge loan lender has told me that would also make it easier to approve the loan. Do you think this is a good idea? Do you know anyone who would fit that description and be willing help? I really feel like I'm in over my head, but still I don't want to walk away from a great opportunity out of fear of the unknown. I have about 200k that I can allocate to this from a 1031 exchange. If I borrow 700k (550k for purchase, and 150k for rehab) at 25% down, that's 175k, and that leaves enough for closing costs. I actually don't even know how much the rehab would cost, but my gut tells me 150k would be enough. This is exactly why, I need someone's help! 

@Alex Price, sure my investing goal right now is simply to maximize cashflow and reach financial independence. I want to reach 5k monthly passive income by April 2020. I think of this round of investments goes well I should get close. I'm actually not in Houston now, I'm traveling fulltime, currently in Australia, but BP forced me to put something, so I used my parents' address.  As far as Texas goes, the high property tax wipes out the cashflow on the deals I looked at. 

@Don Spafford Yes, I spoke with the construction manager, and he said they put about 150k of work into it, new roof, new roof, light fixtures, doors, paint, etc. Only one more unit needs to be redone when the tenant leaves and that'll estimated to cost 4k. I've included that cost in the closing cost line of my spreadsheet, since I'll try to pay it on close out of my 1031 funds. 

I have found one replacement property so far. It's a 24 unit apartment complex in Pocatello, Idaho. Newly renovated, roof replaced, exterior pain, almost all unit interiors, etc. See the image for my analysis. It's currently 75% occupied, but even at that rate the cashflow is positive. Once it stabilizes, it should bring in 12.6% cash-on-cash return. I've tried to be conservative on all the number to make sure I'm not fooling myself. Let me know what you guys think. Good deal?

Thanks @Ken Breeze, I think the consensus seems to be to go multi-family. But 65+ units?? I hope I can start making good cashflow before that point. My only hesitation is that I've heard that single family homes cash flow better for the money put in, and also there's the opportunity to BRRR and maximize returns that way. However, give my time pressure I think the best thing right now is to find one multi-family in the 800k to 1 mil range, close that to meet all of the requirements of my 1031, and then I can always refinance to take out equity and BRRR or whatever at my leisure. That way I'll have more time to find a really good deal too, which is nice. In the meantime, time to fill up my spreadsheet with deals. One consideration is if it's up to 4 units, I could refinance later on with a conventional loan to get a lower interest rate, so all things being equal I'll hunt for that.

Does anyone know if there are turnkey companies that do multi-family? Any tips on which market I should be looking at for multi? 

@Sherwin Gonzales and @Philip Williams I think you're right. Now I'm leaning more towards trying to find one multi-family at at least 800k value, and that way all of the conditions of my exchange would be met with one deal. I can identify 3 of those, and hopefully one will close. If I can find one with good cashflow, that would be ideal. Then, since my LTV would be less than 50%, I could always refinance and reinvest in other things at my leisure without the time pressure.

@Fradel Schaechter Yea, I'm trying my best not to be a sucker. Traveling for the past year in Southeast Asia and a bit of Africa has done a good job of getting my guard up against scams, haha. I agree networking is key. It was a bit of good advice from someone I bet my chance that led me to sell the property in the first place. Otherwise, I would have kept renting it and getting one of the worst cap rates in the country in San Francisco (~3.8%). That's part of why I'm posting here.  

Josh and Gary, thanks for the tip. I'll definitely look into it. Is there certain neighborhoods that stand out to you? Is single family the most advantageous investment there in your opinion?

Phillip and Kevin, yes I agree. I'm learning as much as I can right now. If there's any resource (books, videos, articles) you recommend other than BP, I would be interested to hear it.

Amit, both. I first lived in it while renting out the other bedroom for 20 months (not enough for homeowner exemption, unfortunately), then I rented it for about 3 years before selling when the tenants left.

Hi everyone, I'm relatively new to real estate investing, and I have the task of choosing where to invest 423k in 39 days, so I would love some advice!

I have one deal under my belt. I bought a 2 br condo in San Francisco in 2013 for 500k with 100k down, and I just sold it on 4/2 for 798k, with no real estate agent. I'm doing a 1031 exchange, so the net proceeds are 423k, and I also had a mortgage of 368k left, so I'll need to borrow at least that much to meet the requirements of a fully deferred exchange. The identification period ends 5/17, so I must move quickly.

Here's my latest strategy. There's 3 criteria that need to be met:

1. I must borrow at least 368k
2. I want to have cash that's unrestricted in how I spend it to use for renovations (I can't use 1031 money to renovate properties I already own)
3. I want to BRRR and force appreciation

So, here is my idea:

1. Buy one multi-family that's around 600k using non-recourse lending. I'll put 25% down, so that's 150k. 273k left. My loan requirement is taken care of.
2. Buy one 100k single-family that's rent-ready in cash and immediately refinance it, to get out 75k. 173k left.
3. Buy 2 distressed properties cash at an average of 86.5k value, and I will have 75k (37.5k each) to renovate them.

What do the experts at BP have to say, is this a good plan? 

I'm also interested in recommendations for markets and turnkey companies (already talking to a few). I'm currently researching St. Louis and Chicago, because I have family there that can help me. I'm also interested in Baltimore and Philadelphia for BRRR. Possibly working with ABC Capital, thought I've read some mixed things about them. I'm traveling long-term, so I can't be there person (except maybe for a short time) to keep an eye on things. I really need to find trustworthy boots on the ground to make this a success.

Thanks in advance,

Tony