All Forum Posts by: Johnny P.

Not all cap rates are BS, but most of them are.

Just think about a small repair that a handyman could do in a matter of minutes vs. having the property manager pay someone or have their maintenance man fix. Its like paying $5 vs $250 over and over.

Yes, I would recommend you talk with them about apartments they manage to get a feel for it. But remember, they want to manage apartments for you and will present everything in the best light for THEM.

Maybe you should talk with a few apartment owners in your market and hear what they have to say... I talk to owners everyday and just wanted to let you know what i'm seeing.

Jordan - Sorry I was too lazy to read the other comments, but here is my input.

NNN deals -

Make sure there is atleast 10 yrs on the lease.
Make sure the company is not struggling

read the lease and make sure it is actually NNN. Sometimes they will advertise NNN when the landlord actually has a few responsibilities.

Location is not extremely important, but if the tenant was to go bankrupt, you want to have a good enough location to potentially find a new tenant.

Make sure the lease is corporate guaranteed. This way they will continue to pay you for the duration of the lease.

NNN deals are hot right now, if you want to see a quick list of deals in your area let me know and I will email it to you.

quick story/ funny example - I know an owner of a starbucks that was NNN corporate guarantee. Starbucks closed the location and continuted to pay the rent because of the corporate guarantee. They negotiated with the onwer to pay him a lump sum instead of paying per month for the next X amount of years. The owner then re-leased the building to another tenant and after spending 70k on tenant improvements, he's making almost double what he would have if starbucks would have stayed there!

He was obviously VERY fortunate

I'm assuming you want to stay in the building correct? Unless your company has a lease with the owner(you), I would say thats somewhat hurting the value as opposed to leasing that space up to a tenant.

I would talk to a local bank since the value is under 500k.

I would also recommend having a local commerical broker do an opinion of value for you so you can use that in your negotiations with the bank. Best of luck!

Are you talking about wholesaling apartments?

Most of the owners I talk to in the 10-30 unit range do not have property management companies. Either they self manage, or they have a long term tenant assist in showing the property and signing leases, and another tenant/maintenance man. Most can't afford to hire a management company because all of the increased maitenance expenses eliminate their NOI.

Best of luck remaining passive in apartments 10-50 units. It will be very tough! I've met only a handful of owners that are doing this effectively... and they are managing the property the way I stated above. Hope this helps!

No Problem Tony, I'm glad I could help! Best of luck with your apartment!

exactly! raise the rent and be done with it! Sell potential tenants on the idea of an extremely low bill.

Awesome, congrats!

Tony, I have a guy you should talk to. He specializes in multi-family and does quotes in a very timely manner. I'll PM you his info.

Which apt are you buying?

Please tell me its not the 10unit on Central Ave in Winter Haven

can you 1031 it into your new deal?