First Post

[SteveO]

I look forward to seeing a better behaved group of people in here.

 

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[Lathan]

this forum is in diapers ... maybe 48 hrs old

What's it like looking back and seeing how far this forum has come?

You really created something special here, Mj. Every forum I've ever joined I just logged in once or twice and never returned. This forum is now a part of my daily life. Really learning a lot here. Thanks

 

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[SteveO]

"How to Buy and Sell Apartment Buildings" by Eugene and Stephen Vollucci

This book stresses the importance of buying in locations where the vacancy is temporarily high and selling when the fundementals are more sound.

"The Complete Guide to Buying and Selling Apartment Buildings" by Steve Berges.

This one is all about the "Value Play". Purchase mismanaged properties and improve the operations.

They are a perfect combination for each other as both processes can be used in conjunction.

 

[Veloce Grey]

Most of what I learned about investing in apartments came from two books. It seems that combined, they would make a lot of sense and be benefitial to others. But, I like to golf and workout.

I like to own tropical islands where various models from around the world come to compete for the honour of being one of my many concubines, and workout.

*Sits back and waits 8 years for it to come true*

What's that? it involved hard work? Ok please revise to "I like to dream about owning tropical islands...etc"

 

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[MJ DeMarco]

Erin,

Thanks for asking -- I am going to go the self-published route. The publishing industry fascinates me and it might be my next business venture.

I haven't ruled out a publisher -- they just don't promote very well and of course are expensive.

For me, the challenge is doing it myself.

 

[SteveO]

Most of what I learned about investing in apartments came from two books. It seems that combined, they would make a lot of sense and be benefitial to others. But, I like to golf and workout. There are still investments to be made. I would have to sacrifice something.

We can focus on reading MJ's book. I would enjoy seeing the content as we have taken very different paths.

 

[MJ DeMarco]

Most of what I learned about investing in apartments came from two books. It seems that combined, they would make a lot of sense and be benefitial to others. But, I like to golf and workout. There are still investments to be made. I would have to sacrifice something.

We can focus on reading MJ's book. I would enjoy seeing the content as we have taken very different paths.

Yea, you won't see me giving too much real estate advice on this forum ... simply isn't my area of expertise. I have some knowledge, but don't have any battle scars or experience outside of personal residences and land deals that didn't go as planned.

Glad you're here to pick up my own slack.

 

[Cat Man Du]

SteveO

SteveO,

Can you give us the info on Non-Recourse mortgage loans i.e. on commercial property only, loan limits low-high, any other details needed.
I have a business line of credit - but i am liable. Have a high FICO, but own a few rental properties and would like to expand. Thanks for your help and when is the book coming? Cat Man Du

 

[SteveO]

It is quite amusing reading these old posts. I talked about golf more than apartment investing all the way back in 2007.

 

[JustAskBenWhy]

When it comes to selling- and in my experience- price is the easiest thing to manipulate, by using things you can't change to manipulate it.

Find what the buyer secretly wants- and they'll hand over the $ for it. Price is "never" the issue, look into Grant Cardone's teachings

Ha - the problem is that as a buyer I know how much shit costs. There's no magic to running apartments - most costs are fixed to a great extent. Therefore, my price is reflective of my projections of what the dynamics will be - the trailing pro forma matters but not for underwriting the financials.

but, there are different buyer in the world with differing objectives. Cardone's are very different from mine

 

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[JustAskBenWhy]

I agree with you. I stopped believing in CAP rates long time ago. What a waste of time and energy.

Just curious, what are your sources for funding deals then?

--Shoot @SteveO sorry, we started talking about apartment buildings again, instead of golf courses...

Oh, I still believe in Cap Rates, just not the way most people do

And, for small deals I use portfolio notes with private money. Bigger deals (syndications) - private placements

 

[SteveO]

@ShamanKing . Dredging up some old shit...

 

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[MJ DeMarco]

RD Russ? Welcome and great to see you here. As for spam, there can't be any ... this forum is in diapers ... maybe 48 hrs old. I still am figuring out the ins-and-outs of this board, but I definitely know how to delete spam and ban trolls.

 

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[biophase]

My first post

Hello everyone. It's good to see many used-to-be regulars move over. Looking forward to this forum!

 

[Runum]

This might have been the very first post on the forum....

Very cool. I was on a western US tour when I first read this in 2007. Got here from RDPD forum by way of some dude named "HomeTheatreGuy" Thanks @Russ H

 

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[SteveO]

Would it be okay to ask as to what books you have read? If possible just pm me if you don't want to state the books publically.

I understand you gain nothing from sharing information but I would love to learn more about it all. I broker deals, usually for large quantities of items and have become aware of a coal-mine being sold in North America. I do not believe you have had experience in something like this, but I would consider it "real estate" and perhaps you can share your wisdom on the matter.

The client I have can either buy the coal monthly for his requested 5 year contract (how they originally approached me) or (and as I suggested), the organization should buy their own coal mine, outsource development and mining and ensure themselves a great supply of coal about 50x more than what they are going to pay for-for 5 years, when they can just buy the coal mine entirely at the price of the 5 year coal contract quantity and ensure themselves greatly. (Not sure if this makes sense.)

Any insights/thoughts etc would be greatly appreciated.

Thank you for reading @SteveO

From iAmTrade

Eagerly awaiting a reply even if a negative one towards me.

The books that I learned from are old but still relevant. The examples would be using outdated numbers though.

How to Buy and Sell Apartment Buildings by Eugene Vollucci discusses market cycles and how to buy at the right place at the right time.

The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges. He talks about the value play and how to buy distressed properties with the intent to make them operate better.

Some of us might be adventurous enough to evaluate the ownership of a coal mine. It seems that your client would need to know how much it would cost for the company they contract with to supply them with product.

 

[JustAskBenWhy]

But you already said it yourself... this is a crazy market and prices are not reflecting real operation cost but perceived potential appreciation.

In multifamily space the current high prices have less to do with potential future appreciation and more with the underlying need for big money (which is leverages at really cheap cost) to achieve yield - any yield. The current buyers are buying the delta between the Cap Rates and the cost of debt. In this environment, when Fannie 10-year non-recourse debt is 4.5%, institutional money figures that buying at a 7 Cap get's them 2.5% delta in yield.

They are wrong, because what they think is 7 CAP purchase is in reality a 5 CAP at best, because people don't know how to underwrite. However, with this being true, they still don't loose with debt as cheap as it is. And, remember, they are running out of the paper assets which they don't trust at all.

In the end, however, while their objective is to preserve wealth, mine is to create. I can't be breaking even. And my cost of money is a lot higher. This is why it's so difficult for guys like me to buy 100+ units. It still works fine in the small multi space, because the audience is totally different and their thinking is totally different...

Hope this helps

 

[Runum]

It is quite amusing reading these old posts. I talked about golf more than apartment investing all the way back in 2007.

Deep digging! Don't you have a desert your jeep should be on?

 

[SteveO]

@SteveO
When are you going to develop that land in Utah with a nice scenic nook and write that book? I think it is time, what is your info so I can send money for my preorder

Ha! Very busy these days.

Still working on my house in Yuma. Incredible views and seclusion. Also working on some land development here.

Probably won't build in Moab until the golf course is sold.

Not sure that I could sit long enough to write a book.

Thanks for the thoughts!

---

 

[MJ DeMarco]

Hey Steve, great to see you. You going to ever write that book for Dearborn? They are a great publisher and well noted.

 

[emorgan]

Smart move

MJ- I think that is a smart move. I have found myself around a lot of authors this past year- everyone from Robert Kiyosaki ( you know him lol) to Frank Rumbaskas (Never Cold Call Again).

It has been very interesting to see how both of these guys self-published and then made their way to the NY Times Best Sellers list.

Steve O- nonsense- we can write it a bit at a time over coffee..oh wait, you gave that up...

 

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[Russ H]

Helloooo (hello hello hello)

My, it's big in here!

And I like the way it smells: Someone has removed the garbage.

And I don't see any spam, either!

Very cool.

Thanks, MJ!

 

[SteveO]

Non-recourse loans come in a lot of shapes and sizes. The two that I am most familiar with are conduit (bond money, I believe) and Fannie Mae apartment loans.

I don't know what the lower limits are but there are no upper limits. My guess would be that costs of the loan (legal, engineering reports, etc...) would make it too expensive below a certain level. 3-4M might be close to the lower limit.

There are probably other non-recourse loans that I have not dealt with. The ones that I mentioned are usually very low interest rates but come with steep prepayment penalties.

No book for a while. I have golfing to do.

 

[AroundTheWorld]

AWWW.

Am i getting a cold, or sniffling with nostalgia?

 

[SteveO]

This might have been the very first post on the forum....

 

[JustAskBenWhy]

The books that I learned from are old but still relevant. The examples would be using outdated numbers though.

How to Buy and Sell Apartment Buildings by Eugene Vollucci discusses market cycles and how to buy at the right place at the right time.

The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges. He talks about the value play and how to buy distressed properties with the intent to make them operate better.

Some of us might be adventurous enough to evaluate the ownership of a coal mine. It seems that your client would need to know how much it would cost for the company they contract with to supply them with product.

You could say again the numbers have changed...lol

I just evaluated a deal in at best a secondary market in mid-West yesterday. My strike was plus or minus $7 mil. Called the broker - the seller wants $10 mil +. And you know what - they'll more than likely get very close in today's market. So - question:

Is there no rationale in this marketplace, or is there rationale but it is totally different from mine? I have my own opinions, as you know...

 

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[SteveO]

I agree with you. I stopped believing in CAP rates long time ago. What a waste of time and energy.

Just curious, what are your sources for funding deals then?

--Shoot @SteveO sorry, we started talking about apartment buildings again, instead of golf courses...

Cap rates are a load of crap in most locations. The only cap rates that matter are the ones that you make from your own numbers. This is consistent with what Ben is stating. But @andviv is also correct that you cannot go out shopping for apartments based on cap rates. The numbers being used for comparison are out of calibration on ALL angles.

 

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[SteveO]

Deep digging! Don't you have a desert your jeep should be on?

Heading to moab soon... with a stop to visit @biophase

 

[Runum]

Heading to moab soon... with a stop to visit @biophase

We are headed to Cripple Creek next week. I got see your area for the RV in Mt Crested Butte. Beautiful place.

 

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[Sethamus]

@SteveO
When are you going to develop that land in Utah with a nice scenic nook and write that book? I think it is time, what is your info so I can send money for my preorder

 

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