$1.3MIL Apartment Complexes. My first official offer is $900K. I'm really doing it. Keep pushing it works on HUGE scales too!

$1.3MIL Apartment Complexes. My first official offer is $900K. I'm really doing it. Keep pushing it works on HUGE scales too!

In marketing for investors I've found several big time outfits that buy literally every thing which produces a 15% cap rate. I'm in St Louis, MO and I honestly have an investment firm from New York City I've been dealing with (they'll pay cash up front for property after we close a few deals). I've also found a small group of investors who buy so much property in one area of focus that they can control the rent rates (I believe Matt mentions doing this in the book also). After looking hard for some unlisted properties (and I found several) to sell to my new found laundry list of investors I HAVE FINALLY STARTED TO NEGOTIATE MY FIRST DEAL!!! And wouldn't you know it, it's a 1.3 million dollar apartment complex! Thinking out of the box I figured out if it was a good investment I could move it thanks to Dean and his book along with all of you on here. It doesn't matter how huge it is, if you have buyers it's like shopping with unlimited funds and an even bigger imagination. I have 2 buyers lined up as soon as I negotiate the price down to a 15% cap rate (which may or may not happen who knows). Point of the matter is...

I had him talked down to $1.15MIL from $1.3MIL before I bothered to place an offer of $900K. I have 2 hours of time into this so far(there's a little bit more into apartment complexes with 50 units vs small rentals so I had to do some research there). Using all of Dean's wholesaling strategies every dollar below $1MIL goes straight into my pocket. I'm currently looking at around $100K on my first deal if this goes through! Even if it doesn't go through, look at the storm you can create in a couple of hours time. I'm telling you this works, on ALL scales. I put my second offer ever in tomorrow on a small 2/2 which will leave room for $15K in my pocket. It works huge and it can work fast. Now, go chase it down.

Ben

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LandCzar

I am looking at multi units also. I have read many times it's the same amount of work to go for the big properties as the small, One house deals. Just more zeros at the end. This is something I am wanting to get into.
Just wanted to know where are you marketing? Craigslist, facebook, newspapers etc.
I am trying to get my buyers list going.
Also are you using a team of real estate agents etc?
Sorry for all the questions. I just am always coming up with, How should I do this and that? Thanks for the information.
Best of luck on the deal/deals.
Thanks,Lisa


Multi Units...

You are correct. The multi unit complexes aren't really all that different. There are a few additional terms you need to know.

Unit Mix (number of rooms per floor/units per floor)
Cap Rate (capitalization rate or amount of time for an investment to pay for itself)
NOI (Net Operating Income or amount of money it makes a year)
Pro Forma (actual numbers vs fake numbers)

I can't think of anymore, sorry I'm at work right now and my mind is geared on Engineering. There is a different way you calculate what the property is worth also, typically done by multiplying the NOI by 10. You won't be able to find these on Zillow and such. One last detail. Most investors aren't focusing on the larger units because they haven't gone down as much as the residential properties.

A great wealth of information on this can be downloaded at this link.

http://www.reiclub.com/ezine/bonus.php

This is a great website. If you go here there are a few downloads, all are good, but this is the one we're focused on for this thread.

Free Bonus #4
“How To Make A Fortune From Apartments— And Never Deal With Tenants”
by Dave Lindahl

On a side note I am using CraigsList to gather a pool of investors. It works amazingly, I used to be a darn good network marketer. I will be posting all the adds I used word for word to generate a buyers list of 40 investors in less than 2 weeks as well as where to post it. I got my first 2 investors 30 minutes after posting my first add. They key is consistent work. Develop a presence out there. Currently I am not using any agents. The properties that are not on the MLS seem to be more attractive to the buyers (although I have yet to figure out why it matters).

Have a great day.
Ben

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I am just now learning about

I am just now learning about cap rates and proformas as well. They are of great interest to me. I am going to look at a property tomorrow with a triplex and a duplex on it. I love calculating all the numbers on the multi family properties.

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Keep me posted !!

If you dont mind keep me posted on how to find 40 investors with the online ads in 2 weeks. I've got three in one week so far, but I accomplished that by simply cold calling bandit signs...

Thanks,
Shane

By the way Im from NYC also

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"People Build People"


I need info on commercial assignments

Hi LandCzar I'm a new investor and have never done an assignment deal. One of the first investors/buyers that I contacted is interested in commercial properties. I pretty much understand how a residential assignment works, I also know little bit about Cap rate, NOI, Operating costs,etc. What I need to know is how to structure a assignment deal. Who should I contact first after I find a property the seller or my buyer? How should I work out my compensation (what %,etc.)? How do you figure out about how much a commercial property is worth especially one that's not an apartment building. Can you please give me some info on how I should start this process. Thanks.


Internet Ads.

Post your ads in this thread (below)which was started in an attempt to share successful ads with other DG members. I am sure eveeryone will be interested to read your ads.
Angela

http://www.deangraziosi.com/real-estate-forums/everything-else/19119/int...

Angela


Great Job Ben

Ben, Wow now that amazing. I can't wait to Get my buyers lined up...

Thanks for posting this story

I learned a lot from this

Thank you and God Bless


Finding 40 investors....

In response to finding 40 investors in a couple weeks. I have put up another thread on that. It's called...

Web 2.0 Broken down into small bites!!!

I'll be going through free on-line advertising tactics here. I put 3 posts out there yesterday and 3 more should come today. It may take me a minute, but I promise by next week there will be a wealth of advertising information there. I spent several years and thousands of dollars learning how to do this. I've decided to pass on the knowledge on how to do this stuff for free.

3 investors in 1 week by cold calling is a great job. I'm willing to bet your typical wholesaler doesn't find 3 new investors a week. The key is consistency. Don't stop there.

Achieve,
Ben

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Thanks

Thanks Ben

I really appreciate your help Laughing out loud


Commercial Assignments...

I'm just getting into the smaller duplexes in such. I actually am in the process of locking up a REO duplex right now so I'll let you know exactly how I ran my numbers (I do it the same way as I would for the 48 unit complex).

First we need to know how much rent rates are going for in the area for comparison properties. So let's say 2 bed 1 bath duplex rents for $800.
We can gather that, at capacity that this property will make $19200 a year.

Next we figure up expenses (lawn care, taxes, snow removal, etc). We'll call that number $3000.

Our net operating income (NOI is now $16200).

To figure out what this property is worth roughly I'm multiplying the NOI times 10 (this is how I do the larger units, not sure if it's accurate yet for smaller ones). So I can figure this property is worth $162000.

Now we need to know the cap rate (rate at which the investment will pay for itself). I never move a property that doesn't produce at least a 10% cap rate (investor's snag these up fast). So to get the cap rate we take the our NOI divided my how much we paid for the investment.

So lets say we get it for $120000, tack on $10000 for our effort. Total comes to 130000.

16200/130000=.1246

This is a 12% cap rate. Plus $30000 equity that can be leveraged through 1031 exchange when the market swings back up.

All of this is based on a turnkey opportunity (one that is fully rented out).

You'll find there are several ways to increase the NOI after an investor purchases (raise the rents, add a tenant, etc).

Hope this helps you out. If anyone else is doing anything different please let us know.

Achieve,
Ben

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Good stuff

Thanks Ben for your info.
Steve and Veronica.


How to spot a Multi-Unit Deal

How to Spot a Potential Deal:

• High vacancies – 20% or more $
• In need of lots of repairs $
• Pending foreclosure
• Partners not getting along
• Owners in distress
• Cap Rate is high – 10% or higher $
• Asking price per unit seems to be low $
• Large loan balance – not much equity
• Owner financing being offered up front or in listing
• Pending foreclosure
• Partners not getting along
• Owners in distress
• Cap Rate is high – 10% or higher $
• Asking price per unit seems to be low $
• Large loan balance – not much equity
• Owner financing being offered up front or in listing
• Rents below market value and bad management

To be a deal, the property or seller needs to have
• Rents below market value and bad management

To be a deal, the property or seller needs to have some problems

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Things you will need (Seller's Package)

• Price
• Address
• Number of Units
• Unit Mix which means how many 1 bed, 2 bed, 3 bed, etc
• Rent Rolls
• Profit and Loss statements for last 2 years: 2007, 2008 and Year to Date
• NOI or Net Operating Income to determine the Price
• Only look at current numbers (Actual numbers not pro forma)
• Loan Balance if any and if so, is it assumable?

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Ben - awesome post! Great information

Just want to keep this post on top! What great info..thank you for sharing!!!

I look forward to hearing about your success with this one or others!

Let us know how it goes in the end!

Cheers to stepping out and thinking outside the box!
Louisa

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LandCzar, this post is just

LandCzar, this post is just awesome! Thanks for letting us benefit from your experience!

I would also like to target larger deals (why not?), but maybe more than apartment complexes, I want to take advantage of the fact that I live in an area where there are many very expensive homes, and many of those are likely in foreclosure. You've discussed your success with Craigslist -- was that where you found the investors you mentioned with the resources to participate in these large deals as well as the more average investor? I'm just wondering if I need to use a different medium to find the wealthier investor or if Craigslist works great for them, too.


Oops! Nevermind

No need to repeat yourself - I just read your other awesome post (Thank you!) mentioned above on Web 2.0 marketing. Very very helpful.


Can't Beat this

Ben, thanks for sharing this information. This is what I mean when I talk about giving back. "It is only with giving that you receive." Ben you have set the stage for making your own success. Way to go, all eyes will be glued to the site for the details on your property. God Bless.

Sandra

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"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


Love it

This is a great formula and we are fortunate to be able to learn from such an intelligent and helpful person. Thank you so much.

Cathy

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Ben

This is what I've been waiting for........thanks a $Million for the link to Dave Lindahl, his system sounds very simple & easy to do, just like Dean's. I will be investing in it real soon because Big units is what I want to get involved in, so feel free to network with me anytime, and anyone else that's interested in multi-units or larger. I wish you all the best on this Big deal.

Everyone Can Make A Difference!
John A.


Cap Rate = NOI / Purchase Price (Market Value)

Hi everyone, this coming from Hugh (out of So.Cal). Great to be here with DGs
students; BTW, a new REI also. First, Ben, I believe you understand the word:
altruistic in form and action better than most, and your giving freely inspired me to no end. Thanks...
On the "Cap Rate = NOI/ Purchase Price (market Value)" discussion, I noticed a good site answering many of the questions fielded here recently---which
address duplexes upto multi 50unit prop's.
I'll include an example (and then provide site addr. for ref.Smiling

Say you find a duplex you are willing to buy for $100,000. You determine the property has a Net Operating Income (NOI) of $7,000 a year. To determine the cap rate, you use the following simple formula:

Cap Rate = NOI / Purchase Price (Market Value)

So, plugging in our numbers: Cap Rate = $7,000 / $100,000 = 7.0%
Our cap rate is 7%. I hope this helps, but to get a better description/examples etc. Go to: www.stewarthsu.com/2007/11/17
Peace out, Hugh


How do you find the sellers of the multi-units?

This is great information - thanks for sharing! What marketing methods do you find work best to find the sellers of the multi-units? Do you use online ads for those as well like you do to find the investors, just worded differently to target the seller? Any examples would be appreciated!


$1.3MIL Apartment Complexes.

LandCzar:
Really appreciate your post, will look for more in the future. Thank you
Credence Properties, Inc.
Erika


BUYERS

HI LAND CZAR I HAVE BEEN INVESTING FOR A FEW MONTHS HERE IN NORTH CAROLINA AND I CAN'T SEEM TO FIND ANY INVESTORS OR BUYERS FOR MY PROPERTIES HOW CAN I MAKE CONTACTS AND START MAKING SOME DEALS.MARLEE

__________________

MARSHALL B PHILLIPS


Hello Marlee

Good morning or rather afternoon in your timezone Marlee. I'm only a few month's deep in investing myself. Use all of Dean's strategies. Focus on your strengths. I have years of network marketing and on-line marketing experience. I was able to find and abundance of buyers using some on-line methods (check out my other posting mentioned above to learn how to do that, I'm updating it with tips and tricks about every other day now).

Really it's the Law of Attraction. If you're looking and have your feelers out you'll find buyers. Know what you're looking for. Rifle your efforts, that's how the USA wins wars and we have the greatest military in the world. You're already taking action by seeking out the knowledge on these forums. Thus the process is already in place. You'll have buyers in no time at all. It's how the reticular activating system part of the brain works.

A few places you can look to score some quick wins building a buyers list.

- On-line Classifieds.
- Newspapers.
- I'll buy your house Cash TODAY signs.
- Call FSBO's and ask if they're still investing.
- Google investor meetings in your area.

You can find investor meetings to on reiclub.com. I did a 15 second search and came up with these actually in NC...

Carolinas Real Estate Investors Association
Contact Person: Bill Goacher
Meeting Address: Box 615
City, State Zip: Asheville, North Carolina 28812
Phone Number: 828-252-0723
Fax Number: 828-258-4811

Charlotte REIA
Contact Person: Linda Dana
Meeting Location: Wyndham Garden Hotel
Meeting Address: 2600 Yorkmont Road
City, State Zip: Charlotte, North Carolina 28208
Meeting Time: 2nd Thursday, 6:30 p.m.
Phone Number: 704-891-9619
Web Site: www.charlotteREIA.com
Email: charlotteREIA@carolina.rr.com
No. Members: 150

Metrolina Real Estate Investors Association
Contact Person: Scott Patterson
Meeting Location: Hilton Executive Park
Meeting Address: 5624 Westpark Drive
City, State Zip: Charlotte, North Carolina 28217
Meeting Time: 3rd Thursday, 6 p.m.
Phone Number: 704-523 -570
Fax Number: 803-802-1690
Web Site: www.MetrolinaREIA.org
Email: info@MetrolinaREIA.org
No. Members: 350

RIC-27870
Contact Person: Jim Garrett
Meeting Location: Shonneys
City, State Zip: Roanoke Rapids, North Carolina 27870
Meeting Time: 3rd Tuesday, 6 p.m.
Phone Number: 252-537-5700
Fax Number: 925-665-1453
Email: ric@27870.com
No. Members: 51

Triangle Real Estate Investors Association (TREIA)
Contact Person: Ray Lable
Meeting Location: North Raleigh Hilton
Meeting Address: 3415 Wake Forest Road
City, State Zip: Raleigh, North Carolina 27609
Meeting Time: 3rd Tuesday , 6:45 p.m.
Web Site: www.treia.com
Email: rlable@****

Take plenty of business cards with you. Exhaust all of the above resources. Advertise, get contacts, call and email those contacts and start to build a relationship with them. Get out there and shake some hands. Remember to stay consistent and persistent.

Achieve,
Ben

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Quick tip

MARLEEPH51 wrote:
HI LAND CZAR I HAVE BEEN INVESTING FOR A FEW MONTHS HERE IN NORTH CAROLINA AND I CAN'T SEEM TO FIND ANY INVESTORS OR BUYERS FOR MY PROPERTIES HOW CAN I MAKE CONTACTS AND START MAKING SOME DEALS.MARLEE

Now I'm not big into multi units even though I'd like to be but this one is simple enough for me to answer.

Take a look for the investors and network with them. The next time you see a "we buy houses" type deal, call and talk with them. Set up a meeting and share information. I did this, it's a big help.

__________________

Allow your fear to gently pass. Then genuinely ask yourself,
“What needs to be done?”


Cap Rate's & Cash on Cash On 2-6 units

Hi All,

You really don't want to buy 2-6 unit props using cap rates or cash on cash
returns, they are to small for this type of analysis. This can get you in BIG
trouble. (Trust Me I Know.)

My rule of thumb is to have a prop of 3-6 units cash flow at least $600.00 a month.
( I don't buy 2 families. I find them to risky, that's just me. Will flip them all day long tho.)

That means that after all Expenses & Mortgage is paid I still have $600.00 in
my Pocket. There is a lot that can eat up that $600.00. I also like to have
$4000.00 in reserves, that will cover a heating system, new roof or any
other thing that will come up.

Hope this helps,

MRK

__________________

"IF YOU DON'T TAKE ACTION FOR YOURSELF, YOU'LL ALWAYS BE TAKING ORDERS FROM SOMEONE ELSE."


If anyone would like an in

If anyone would like an in depth tutorial on capitalization rates there is one on creonline.

http://www.creonline.com/articles/art-216.html

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Thanks for the tips

I currently have a 16 unit and a 10 unit under contract in PA. Though I have a large buyers list they are primarily small scale single family homes. Any suggestions on how to find large scale buyers? I have found that those scouting craigslist are small potatoes looking to make a quick buck. Not really your large buyers.

As far as REI groups I also suggest that you network on web based Investor groups as well.

Here are a few...
RealEstateInvestor.com.
freerealestatenetworking.ning.com
****

I would also recommend joining the Investor groups in social networking sites such as facebook. I have gotten a few buyers this way.

As LandCzar said it is all about networking and getting out there.

__________________

Do not fear, for I am with you; do not be dismayed, for I am your God.I will strengthen you and help you; I will uphold you with my righteous right hand. Isaiah 41:10

http://realwholesaling.com FREE wholesaling tips and resources!

To your success,
Carol Stinson


Thanks for the sweet article

Thanks lkward13, for the sweet article, will put his formal to the test against
my software that hasn't let me down yet on the 48 unit prop I'm doing my stage
1 due diligence on right now.

MRK

P.S. I wasn't trying to discourage anyone with my last post, was just being
honest and telling it like it is. Right now is the best time ever to get into
some kind of Commercial real estate. I'm buying all the Value Add Apartment
building I can get my hands on right NOW

P.P.S. I would stay away from Retail building, strip malls, shopping mall,
retail centers things like that, unless its in an Emerging Market.

__________________

"IF YOU DON'T TAKE ACTION FOR YOURSELF, YOU'LL ALWAYS BE TAKING ORDERS FROM SOMEONE ELSE."


Food for thought

Just a quick note...congrats!!! Just incase you decide to keep the property here is some information you should know. You chose the closing date...lets say on the 3rd of the month. The current owner collects the rent on the 1rst of the month and brings it to the closing which you will receive...for this examle lets say it comes to $20,000...can you say Cha Ching$$$$ You sign the loan docs and walk away from closing with a nice profit. Now your first payment won't be for 30 days, you collect the rent and pay your first mortgage payment and you still have the $20,000 from closing. This is something an investor should know that you are selling to so if you sell it to an investor maybe you can negotiate some of that amount for yourself as well. Besides your finders fee.

God Bless
Jan-Michael


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