Jan 2, 2019
What happens in deals? There’s usually some bumps along the way. They don’t go perfectly, but they usually go on to close.
This is the first of a three-part series where I break down the details of what happened with my University Crossings deal. I share what went wrong, what went right, and how I overcame obstacles that are often part of multifamily transactions.
Topics on Today’s Episode:
- How to find a deal? Broker relationships
- What to Look For: Numbers, stable cash-flowing properties that need little work
- Set a Goal: Increase occupancy or/and raise rents
- Manage costs when spending money; seek higher than average maintenance
- Use Residential Utility Billback System (RUBS) to its full potential
- Reduce office admin costs to save significant money
- Underwriting: Key to finding good deals is that you must be willing to do the work
- Site Visit: What surrounds the property? Who’s in the area? Is there much crime?
- Rookie investors make mistake of submitting offer before setting foot on property
- 90% of the game is to get brokers to know, like, and trust you
- Occupancy rates help determine financing options
- Do a CapEx budget (rehab money) per door
- Win bid by stacking/leveraging deals and submitting Letter of Intent (LOI) packet
- Ask broker for pricing guidance to get invited to “Best and Final” round
- Identify seller’s hot buttons: Price, surity of close, etc.; call broker to get the price you need to use to be competitive and win the deal
- Avoid agreements via email and seller’s purchase and sales contract; get them to sign your LOI to confirm that they agree to everything in your language
- My Challenge to You: Be in pursuit of both time and money via commercial and multifamily real estate; cash flow is the new sexy
Links and Resources Mentioned:
Quotes:
“Underwriting: The key to finding good deals is you have to kiss a lot of frogs. You just got to be willing to do the work.” Corey Peterson
“We go to the property, and we do a site visit. Things can go from good to bad quickly.” Corey Peterson
“They’re not willing to go visit the dirt. You have to be really willing to visit the dirt...before you actually make an offer.” Corey Peterson
“90% of the game is to get brokers to know, like, and trust you, and to be a part of your team.” Corey Peterson
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