The other day, I did a talk about forcing appreciation and I mentioned how I only buy for cash flow. This led to a barrage of questions around buying for appreciation. So, I thought I would answer it here. As a recap, there are two basic ways a multifamily deal makes you money: 1)…
As value investors, we are always looking for multifamily deals we can get into, improve and drive revenue to increase the net operating income. This is referred to as ‘forced appreciation’, when you, as the investor, are actively working on the property to improve cash flow and reduce expenses. This is different from ‘natural…
We are in a competitive market today. When you are preparing an offer on a deal that you want to buy, you need to do your best to be easy to work with, aggressive and able to close. This means handing over a Letter of Intent that is strong and has the best chance…
Here are the five things you will need to do to take down your first multifamily deal: 1. Find a deal — You need to network with brokers. When you do, you need to convey the confidence you can actually close the deal (and get the broker paid!) It doesn’t always need to be through…
What are your deal breakers? Evaluating a deal varies from property to property. My focus these days are Class C and Class B deals, so it really depends on the business plan for the property which drives the underwriting process. This includes gathering the expense and income data, building a financial model, performing rent and…
Let’s talk about getting loans for your multifamily deals. Here is a rule of thumb: the easier a it is to get a loan on a deal, the less money you will make. There are many different types of loans. The easiest one to get is a residential loan, which is 1 to 4 units…