I'm Looking For Some Career Advancement Advice
Here is my background:
I'm currently an owner of a management company that specializes in fee mangement of apartment complaexes. Most of them are in the 36-80 unit range with some that are larger.
We are very good at what we do, but it is people intensive and we are always trying to replace business that has either outgrown fee-management companies (i.e. owners who get big enough that they self manage) or properties that are sold to new owners who self-manage.
The process of constantly replacing business is wearing me out and I need to focus more of my energy on building a portion of the company that I have total control over. This means becoming an owner of more investment property.
I am already a 50% owner of a small industrial/flex space park that should be paid off in 7-8 years. It was a sweetheart deal that I was lucky to find and it has been a fantastic investment.
What would you all recommend I do to start to increase my real estate holdings? I'm not a fixer-upper kind of buyer. I'm not looking to buy and flip properties. I want to buy solid pieces that have tenants in them that can pay the mortgage for me and maybe provide some amount of cash flow at the same time.
I've always looked away from buying duplexes or 4-6 units places because they seem like more trouble than they are worth.....but am I being too close minded?
I would love to hear some suggestions.
Thanks
Quote:buy solid pieces that have tenants in them that can pay the mortgage for me and provide some amount of cash flow at the same time.
It appears that you've already answered your own question.
What kind of property would you recommend? Duplexes? Retail? And, what is the best way to find the good deals?
Now you are into acquisition techniques. The Beginner/Birddog Forum and the Carleton Sheets Forum have a lot of general discussions on locating deals and constucting offers.
The Subject To Forum, Short Sale Forum, Foreclosure Forum, Lease Option Forum, Tax Lien Forum, Rehabbing Forum, and Whol/esale Forum all address their specific property acquisition niche. If you want to venture into something on a larger scale, try the Commercial Forum and the Developer Forum.
There is no single answer to your question. You have to develop your own investment criteria, identify the price range of properties for which the market rents satisfy your criteria, then use the acquisition technique that works best for the situation at hand..
Can you purchase some of the properties that that you manage ?Let your clients know you are looking for investments . Do you manage any properties that could be more profitabe but the owners don't let you maintain them as as well as they should be?
These could be great deals to set up long term owner financing deals . They get guaranteed income, (Something they aren't getting now) and you get investment properties that you bought at a discount because they aren't performing the way they could.
Your not a fixer upper sort of person ? Find someone who is and buy properties from them. There are plenty of investors who will sell you homes at a discount just because they know your going to be a repeat customer. Find the guys in town who are buying the bank-repo's who also do rehabs let them know you want to buy rehabbed homes that aren't going to need constant maintence after you buy them (make sure they do a good rehab). I have a buyer who loves these little cracker-box houses in a certain area and every time I get one over there I call him first. He does his own rehabs, but hey , if he wanted to buy it rehabbed we could work that out too.
If you have bank financing options its easy to get 70-80% LTV loans on investment properties that have just been rehabbed. find the investors out there that will work with you and start building those relationships .
I agree with you regarding duplexes and most multi- family properties . I've lived in a couple duplexes in my time and have hated being that close to my neighbors . if their dirty you get bugs noisy, no sleep-... kids upstairs, no peace-... pets, you can't go out in yard...sorry I'm having flashbacks, i could go on and on .
sounds like you can manage people though, hire someone to manage rehabs for you . buy cheap, rehab, put long term financing on them and rent them .
Good luck hope this helps
Do you have cash? A decent financial statement? Your experience as a property manager will go a long way to get you a loan.
If you can't qualify...do what you did before. Seek out a partner until you are to the level that you don't need one (or else keep moving on to larger and larger projects that are constantly above your means as the donald did)
My Dad has been investing on the side for 47 years. His secret is to find a property with a problem. (Make sure the problem is not too intense- so you can solve it).
You'd be surprised at the dumb reasons why people give up on good investment properties. I bought a house once because the owner didn't like the next door neighbors. Those neighbors got me a great deal. Then they moved.
Cordially,
Alice
You need to find partners. You should realize that you bring valuable experience to the table. Most investors don't want to deal with the "people" side of the deal so you can effectively manage that side and let the partner(s) manage the rehab, purchasing and such. You need to expand your contacts. Join some local REI clubs.
[addsig]
wow, you have a great start by owning your own management company.
I would start by using your records to know what areas are giving the best returns or is up and coming. Then look up the owners of buildings and send out letters to see if they are interested in selling.
2nd, depending on you client relationship, find out if any are looking to get out. Do you have any properties that are in constant problems (that YOU can fix). Might be worth a look.
3rd, Get in touch with rehabbers/investors and let them know what your looking for.
You clearly have the PM part down, and it sounds like you don't want to mess with smaller properties 4-6 units, which I would like to know why (around Chicago there is great cashflow in 2-4 unit buildings), but I guess everyone has their own comfort levels too.
Best of luck to you.
Dave