Austin (neighborhoods with easy access to The Domain (2nd downtown))

realestate

#62

75-unit in Houston. $4M asking, less than the price of a decent PA house.

13932 Victoria St Houston, TX 77015 · Multifamily Condo For Sale $3,990,000

7.84% cap rate.


#63

Here you go. He was on BP podcast, I thought I heard a google financial analyst’s story on BP. Lots of hardwork. Clearly, @manch not for you :slight_smile:


#64

Awesome!! Will listen tomorrow.


#65

You know me too well @RealEstatebull. I despise hard work. :smile:


#66

Me too, I’d prefer smart work too, but may be that’s what stopping me to go to next level :slight_smile:


#67

Assuming $800 monthly rent per door. Total annual rent income is 1M. Assuming a $300 monthly profit per door, his annual profit would be 360k per year.

Assuming $80 per door, his acquisition cost is 8M. That’s a 12% rental yield.

This all looks good. Only question is the historical rent and price growth rate in Houston.

You can acquire 75 doors in one day with 4M. NOI is 360k. Cap rate 7.8%


#68

I listened to that podcast this morning. That was from 2016, one year after he first bought 5 SFH in Houston. He then bought a 14-unit apartment building that was in horrible shape with drug using tenants who didn’t pay rent. Lots of effort went into rehabbing that building. In the end he and his 50/50 partner were able to raise rent from $500 to around $750 each door.

Big appreciation by brute force. Something you can do with MFH because value = cap rate x rent. More rent means higher value.

The next deal he brought in a money partner from San Jose. He said he was out of cash after the 14-unit.

So no, it’s not just his own money. He had more than one partners. That’s typical of what I see in BP. Nobody can scale from 0 to 100 door in 3 years using only their own money and own 100% of everything. They almost always have partners.


#69

You can do it by selling your stocks and get a mortgage. Easy


#70

either way, his 14 unit rehab and value add is a good story on its own right. isn’t it?


#71

100 door might be worth 6M. With 75% LTV, he might have 1.5M in equity. Not enough to FIRE.


#72

Sure. I heard about these stories quite often though. Not every one enjoys dealing with rough projects and rough tenants though.

Give it a listen and share what you think


#73

I have read some of his internal posts, will listen to podcast. This is the kind of thing you do for a while, then build a team to get it done for you, no?
just like any other business tht you will want to scale. RE comes with outsized benefits for the right set of deals, and value adds are juicy. I am sure @cloud and @Elt1 would agree. I should start buying austin… but need to first get out of the hell hole that’s volatile stock market :slight_smile:


#74

If you have the connections and the team in place you can ask for equity with no money down. So you can own say 10% of a project plus management fee if you bring the deal and investors together. So yes it can be very lucrative.

At the end of the podcast he mentioned he wanted to start a contracting business.


#75

that’s why he has a property management. I am sure it’s more for connections & finding right opportunities, and reducing costs due to scale.


#76

Why don’t you meet with him for lunch and pick his brain?


#77

There are internal re-meetups, but never been to any. I am introvert (Except at my job, i am very outspoken :)).
Talking the talk, not walking the walk describes me these days on business ideas.


#78

Then listen to the podcast. I like his negotiation technique. Also he said he too is an introvert. Good advice from him in picking a business partner: find someone with a different skill sets from yours. So he partners with an extrovert.


#79

On drug, people want expanding business.


#80

He is a amateur in Texas. Let’s see how he does stacked against good old boys. Many Californians come back with their tail between their legs. I know one Cali billionaire that lost millions in Dallas


#81

It also looks like he is not quitting W2 job. So he doesnt have enough equity to retire. He took up a job with houston rockets, so he wants to be closer to his deals.