112: 1000 by 2020 Update – On the Hunt for 100 Plus Units

June 23, 2017bmanasseroUncategorized2 comments

SHOW NOTES FOR EPISODE 112: 1000 by 2020 UPDATE – ON THE HUNT FOR 100 PLUS UNITS

In this episode, Bill provides an update on his current properties and his search for 100 plus units before the end 2017. In addition, Bill shares his frustration with single family home rentals and why he has such a passion for multifamily properties.

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Basic Update

It’s been a while since I shared an update on my goals and thought I would take this opportunity.

For those who have written or met with me, it has been a pleasure and I’m excited to see each of you moving forward on your real estate investing goals. There are those who have just bought their first properties, some have even bought apartments. There are even those who have joined me for a goal of 1,000 units in 6 years. It’s great to see people taking control of their futures by educating themselves, finding mentors, writing a strategic plan and TAKING ACTION!

I have been trying to have guests on my show that can talk about some of the areas of concern many of you have shared with me. For example, Ken Malloy, one of the members of our Facebook Group (and a great guy who is a news anchor in Fresno California), asked about crowdfunding and, in response to his suggestion, we recently had a excellent show on crowdfunding (episode #097 with Ian Lippolito, the founder of crowdfundingreview.com (?)) So, here’s a shout out to Ken for the great suggestion.

Working with a mentor who is walking me through the 100 plus purchase process that will, Lord willing, happen this year
Update on Properties
- Atlanta – Single family
  - Tough eviction
  - Left the property with lots of repair expenses
  - Ate up profit – another reason to go multifamily
- Memphis – Duplex and 1 Single Family
  - 3 section 8 tenants
  - Excellent property manager keeps units rented
  - But Section 8 improvements, make-ready and other repairs have eaten up much of the profit on those properties
- Word of Advice: With my goal I should never have invested in SFRs
  - Think about — it if you can clear $200 in monthly cash flow & you need to replace something like water heater, central a/c, roof, it can kill your profit AND cash flow
- Indy – Duplex and 22 Unit
  - Duplex in Bates Hendrix area cash flows well
    - Had trouble finding new tenant (3 months with no rent on one side)
    - Can’t increase rents
    - If property was upgraded (new siding, new windows, etc.) , I could increase rent but upgrade could kill profit
    - I’m waiting
  - 22-Unit
    - Remaining Work
      - Final hallway rehab – Basement
      - Replace 22 doors
      - One unit to fully-rehab
    - Experiment: 1 bedroom basement unit to convert to furnished AirBNB one-month rental
      - Al Williamson advising
      - Had one booking already – less than week after posting
      - Normally rent for $500 – one month on AirBNB – $900
    - Bought for $350K – $25% down ($88,000)
    - Appraised at purchase at $400K
    - Spent/sending $40-50K in rehab
    - Current mortgage $262K – 7.875% – Want to re-fi
    - Increased rents 13-16%
    - Reduced expenses – 15%
    - Current value: at 8 cap – $650 at 9 cap $580 = Equity $300-388
    - Cash flow $6-7K
    - Cash-on-cash: 40%
- 100 plus unit
  - Researching and selecting 3 emerging markets (2 already selected)
  - Getting in the right market is critical
  - Talking to potential investors
    - If I do cash-out refi in 22-unit could buy $1.5 million building without investors but would need rehab $
    - Otherwise may have to raise as low as $500K or up to $1-1.5 million
  - Starting with targeted direct mail
  - New areas so am working with brokers

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