Where I come from no one believes in this. It's considered a "pipe dream". The only person that believed in me was my mother when I did my first deal. IDK anyone with money. Growing up in the "hood" has very little perks lol
I feel you Ty Easy...I bought my first duplex when I was 21 years old., while working for GM, in Flint, Michigan. I went on to purchase single family homes, a four-plex, and a 6-unit apartment building. Ans lilke you, the only person who truly believed in me was my mother. Close friends, Co-workers and/or family did not get the "big picture, that I had, in the beginning.
@@justinfay3011 lmao this made me laugh. Its ok bro. as long as you believe in yourself and work hard i believe you can accomplish your goals. I hope you never give up believing in yourself 🙏
This is my personal page for cursing and watching twerk videos but I am a Real Estate Broker in two states. I have a separate page for Real Estate. I am really thinking about doing the Yoube to teach people about Real Estate. I come across So many people that dont know anything about Real Estate. Also the deal he is talking about is not common. In fact it is so uncommon a lot of people are not willing to work with you. He is right that if you want that kind of deal you are going to have to start building a reputation.
I love hearing these stories about 18-unit buildings that people bought for a million dollars. Out here in California, a million dollars buys you maybe a decent single-family.
I am also a member of BP. I said to some one "its not worth the time and headach to manage smaller homes...makes more sense to do one building. Would you agree?
I live in Tacoma where rent has increased the most out of almost every city in the country. Could you help me finance a complex that had a great Cap rate?
Been listening to bigger pockets and reading to develop myself. How did you network to get to this point? Also what podcast episode were you on? Thanks!
Great video! Since this is five years old, I'd like to know how this investment is working out. Do you still own it? If you sold it, what did it sell for? Also, as the GP, what was your equity share?
Do not rent that is my philosophy i despise renting no offense it's a rip off for the rest of your life. Live in your car if you must because it's a rip off to rent.
How did you guarantee the mortgage? Do you make your investors guarantee the loan or do you have other assets which value meets the loan size? Or is there another way to guarantee the loan without doing either? I've read up quite a lot but that's one thing which still a mystery to me, how those who want to get into small multis can guarantee the loan if their net worth or assets is not worth the loan size. Did you have a sponsor? If so what do they charge?
+musicandlife1 Hey there - Our investors don't guarantee the loans, we do that as the General Partner. We have 10 years of experience in the business and other assets also, so we are a good loan these days. That being said, perhaps you are just getting started and don't have a track record. One option is to start small enough that your earned income will cover the loan income requirements (maybe a 2, 4 or 6 unit deal) and build up a track record over a year or so. Be sure to use a bank that looks at the asset, like B2R Finance. Another is to enroll a sponsor as you referred to and give the sponsor some of the GP side. If you are going to be the main active partner don't give too much of the GP side away to the sponsor.
+Matthew Oliver (Sales Manager of CN) Hey Matthew - the bank has to have something for collateral, meaning something that backs up the loan, something they can take if the terms of the loan is unpaid. One thing is the asset they are loaning against. They tend to add in other additional collateral like the credit of the investor. Meaning they can come and take other things from the investor if they can't recoup their debt by taking the asset they are lending on. Loans where the investor has to personally guarantee the loan like this are called a recourse loan. On larger transactions, typically above a million, you can get a non recourse loan meaning the only collateral they have is the property they are putting a lien on.
Thanks! Here's some free goodies. Just text DEROSA to 66866 for several hours of video training, articles, and other stuff you can't get anywhere else. Enjoy!
I’m 23 years old. I’m trying to buy an apartment complex. I don’t have much of a down payment though :/. Is there anything I can do to achieve my goal?
Look for investors brother use other peoples money but take a percentage from it. find someone to invest but you do all the work and take some of the profit make sure it is a win win for both of you guys or more if there are more investors.
Hey Matt! Allie here, I read your book! Great stuff. I have only done equity deals to this point, but want to move on an 8 unit building with only debt, commercial bridge loan 12 months, 75% of purchase price 100% of construction. I need help figuring out how to borrow the other 25% plus closing costs without using the property to collateralize the loan, do you have any suggestions of where to secure the private funds and how to offer structure it?
Awesome, thanks for the compliment on the book! I hope it added some value to you. For what you're trying to do, it sounds like a pref equity structure would be the best. That way, investors have collateral against the company that owns the property, not the property itself. They get a flat rate of return on their money, and they are first paid before you get paid. Hope that helps
This was of great value to me. My question is how to I get my foot in the door? I have no experience in this area and I’d like to some day to commercial real estate. Do I need to become an agent? Get a certification or just attend some conferences to get my foot in the door? Thank you.
Great video, I sell real estate in NYC and own my apt out right. I'll be investing shortly, my issue is can't seem to get a mortgage because my income is inconsistent, such is life. Your investors, it seems similar to investing in R.E.I.Ts, very interesting approach.
Hey Tony - Syndications are similar to REITs but there are 3 distinctions - 1) they are not publicly traded meaning you can't get in and out as easily by selling or buying shares on the market. 2) the price to buy in is higher than REIT prices 3) you have to be an accredited investor to participate (this rule is changing soon). For that apartment you have, consider doing a line of credit with that as collateral. If a Home equity line doesn't work try a business equity line. Most smaller banks in NYC will talk to you about it. Good luck!
tom jens great question. We calculate our "carve out" based on the return investors will get on their money with their share. Our target is to get investors a return in the mid teens once the property is stabilized. On this deal, our share is 30%.
I like when it is simple/straightforward. Some companies have "asset management" fee, then profit sharing, then some other "fee". Why not simply have one simple cut, no need to over complicate. On the other hand they are probably thinking that they want to have some fees even if zero profits were made at some year :)
Kevin Edwards there are plusses and minuses to doing deals by yourself but if you are just getting started I highly recommend investing with your own capital first to get a track record going.
Hani Kazmi Appreciate your note! If you ever have any real estate questions please feel free to email them to us - helpme@derosagroup.com and we will answer them on an upcoming Mentorship Monday episode! :)
Minus investors, do you think it would be a good idea to purchase and repair a rental property cash can or is it better to take a small loan even if you have the cash? Why?
Michelet Fleurant it depends on the source of the loan and the source of your cash. money is so "cheap" to borrow right now, if you can get it from a bank you can't beat the rates. if its private money at 9 to 11 percent and you have the cash, use your cash. then refinance into a bank loan to get your cash out when the renovations are done.
Thank you for posting this video. I am interested in knowing how your structured the deal for your investors. Did you agree to pay them a quarterly payment at an certain interest rate plus a percentage of ownership in the property? If so, what was the interest rate and what was their percentage of ownership?
Was this building also located in Trenton NJ? I'm interested in getting into a 5+ unit multifamily soon, but I live in Westchester County, NY and the prices are rediculous. Where do you start to network to find the listings? Loop.net? Thanks
+Karl Tech It was in Philadelphia. I use Loopnet as a networking source, a way to meet agents that are active in your target area. Typically the deals are not great because the good ones sell before they get to Loopnet. The trick is to get an agent to give you first look. If you are in Westchester I have heard good things north of you, in Albany and other post industrial towns along the Hudson.
Hey Steven! Yes this was an in house listing with the commercial broker. It took me a while to get him to take me seriously but once he did he gives me first dibs on deals when he gets them. In my experience, once a deal gets on Loopnet it's already been passed on by the brokers inner circle and the inner circle of all the agents in his office. I rarely see good deals there but have found that its a good place to network and find an agent that is working in the area you are farming. I hope that helps! Matt
May i ask? let say you start whit small 4,5 unit aprt rite? what about if u got more money to buy 18,14 unit rite way not a 5 what u will do?.Reson why i ask im Truck driver i got money so im think about do same way just dont know how to start,buy 4,5 unit or 24 rite way.Pliz give answer if u can thank you
osm osm Hey! Thanks for the comment. Sorry for the delay! Hit me up on Bigger Pockets, I have a bunch of other stuff out there. The link to my profile is in this videos' description. If you have that much money to start with, then you have the option to take down the bigger asset (18 to 24 units) and put a property manager on it for you on day 1. It doesn't make sense to use a PM on a smaller deal and some won't manage stuff less than 10 units, and the ones that take deals like that may not do it effectively. It also depends on your end goal. If you are looking for some side income while you continue with your day job then doing a passive investment like that may be the ticket. If you are looking to become a full time investor / landlord then you may want to manage yourself at first to learn the ropes, if you can swing that. I hope that helps! Matt
Hi Joel - It all goes back to management and having a local advocate. We just looked at a 50 unit in central PA and will probably be doing that deal because we have a manager in place and an investor that is local to that market! We are always looking at great deals so if you want to hear more shoot us an email at info@derosagroup.com or look us up on www.BiggerPockets.com. Take care!
Sensi how do you put apartments on contract and what I need to do so I can pay for training with your training after my first deal because I only work twice out the week because I'm over qualified, how do I create a track record on myself with a single family home and what's I say to investors and it's slot of vacant apartments in Columbia SC with no money down
im intrested in real estate i have a multi million dollar idea with no where to start kinda this is like a dream job for me hoping i succeed i got faith in myself
dragon flow'e.n.t a good place to get started is to get a strong WHY that you want to be in this business, outside of making money. then set some 1, 3, and 5 year goals. that will give you a bit of a compass to guide you.
Hi Ed! Absolutely, we still Monitor and respond to comments regularly. Thanks for leaving one! We have several different efforts for staying in touch with our investors, and enrolling new ones. Some efforts we do our a monthly newsletter, and Live Events. You can hear more about what we do on our website www.derosagroup.com, and we go deep dive and all this stuff in a recently released book, Raising Private Capital!
Jamel Turner we typically pay our investors once a quarter, and their payment has to do with their percent ownership and the current cash flow on the property.
The 18 units for my teams in fangtech they own the 18 units by deducting their pay with 0 interest on me the ownership titles be return to them when the deduction end.
I found a building I am interested in a six-unit apartment can I bring you in as the buyer I have no idea of what I am doing so if I can get you in as a partner I would appreciate it
+Nickie C Hi Nickie - All you have to do is ask, LOL. If you are going to do a deal then you should be willing to hire that attorney for a fee to help you structure the deal. I would look to build your network of professionals before you have something under contract so that you can move quickly when the right deal comes along!
My question is how do you build your professional network in the commercial real estate (multi-family) industry? You mentioned finding someone to let you participate in open houses and look at financials for buildings that are up for sale. How do you find these individuals?
"How I bought an 18 unit apt starter pack" A) had my mom tap into her retirement and lend me the funds for first buy B) waited for mom to die and cashed in on the inherited assets C) I was born with money
For us, it was "None of the Above". We went with D) Work hard to build up a track record of our own deals, then approach potential investors that wanted to make a good return on their money to partner with us. Repeat, tweak the process, and repeat again until we had enough investors lined up to do a deal of this size. It took sweat and time, but it was worth it. I should say that everyone knows people with money and can do exactly what we did. Here is a link to learn more about a course Matt Faircloth taught through the local REIA club. They have it priced at $297 to take it online. Check it out! th-cam.com/video/jpFgUWOXTuM/w-d-xo.html
Hi there, just curious, as a silent partner what kind of rate of return do you think a guy could make when he has someone like you manage it for him? I had a windfall as a teen and I'm 20 years old now, in college, and I wanted to get into real estate. Thanks!
+Austin Luepkes it depends on the deal. This particular building is doing well, with a return in the mid teens. to hear more about our projects shoot us a line at info@derosagroup.com
Hi Matt, thanks for sharing! what would happen if a person had that kind of money but had never done a deal, still do the track record and get to know the commercial real estate guys? I'll definitely be checking some more of your videos thanks
Hi David, Great question. Liz here (Matt's wife and business partner). I can certainly answer your question so I figured I would jump in and get back to you as quickly as possible! If a person has money put aside to do this size of deal and has no experience, there are a few ways to move forward. My first question to this person would be - what is your long term goals? Do you want to be an active investor (someone doing this business full time eventually) or do you want to be more of a passive investor (invest with someone else and keep your day job). There are many paths to wealth so it depends first on this person's goals. My suggestion would be to find someone who has the track record and established relationships to mentor this person through finding, evaluating and closing on a similar sized deal. This can be someone who takes a percentage of the deal, becomes an equity partner, or simply gets paid for their time. I have seen it work more effectively if they are an actual partner in the deal, that way this person can lean on their track record in order to secure private money and traditional money. For example, we just closed on a 49 unit building. The bank we ended up working with completely vetted us out. They of course vetted the deal out before agreeing to finance it, but they vetted our track record out, our resume, other deals we have done. They are investing in the building as much as they are investing in us. So, the greatest thing this person can do if they don't have a track record is to build a track record with smaller deals first and work their way up. Or partner with someone who brings the track record to the table. I hope this helps answer your question!! Moving forward, if you have ANY RE investing questions, please send them to helpme@derosagroup.com and we will answer them on an upcoming Mentorship Monday episode!! Thanks!!
Dominique Summers One of the best business planning books out there is called the One Page Business Plan by Jim Horan. He has a bunch of versions but I like the original one the best. It is simple and a great book that guides you through the process of actually writing a business plan. I would highly encourage you to pick up a copy. I think you can get it on Amazon. Good luck!!
I would to like own a apartment building or multi family investments. How would you suggest one get started in this area. maybe by networking or getting a real estate licence? I live in Michigan btw. Thanks for the advice.
Ahmed Hamed We are based in Trenton NJ and this building 8s located in Philadelphia. Thanks for watching our videos and commenting!! Let us know if you ever have a question for our mentorship Monday series. You are welcome to email us at helpme@derosagroup.com :)
jose cruz you should definitely start small, maybe buy a 2 or 3 unit and live in one and rent our the others. you can learn a lot about real estate on www.BiggerPockets.com, check it out!
For an apartment building of this size, do you need to have someone that works there? In the future I want to be a landlord but I really don't want to have to hire employees.
Capn_Wreckz you don't have to have an on site manager (some call this a super). You should have a dedicated maintenance support team but your management company can have that set up on their side.
I don't understand why someone would go into a deal with a bunch of people then split the profits 8 ways? Your original cash flow will be like $6000\8= $650 😦
+noe name Remember my friend "Cash is the worst investment" wise words from Warren Buffet. Its better to get cash flow generating instead of letting cash sit around to get fucked over by inflation. I would rather get $640 a month for a 10000 investment. Then having my 10,000 respectively be worth $7,200 in the next 10 years.
+Maui AF You hit the nail on the head. It's all about the return on investment! The investor ownership of the property is based directly on how much they put in, so it's no about the dollar amount of the return it's about how much the overall deal is making which is reflected directly back to them.
Hey Cy - normally the GP takes an equity stake so that they are tied to the profit on the deal. As long as the LP's get plenty of ownership for their cash in the deal it's a good partnership. I don't like GP's taking a fee only for putting the deal together, I think the GP is motivated to perform if they have some ownership too.
That's an extra income of $650 for how long...The next 20-30 years. If you can't afford to do it alone why pass up an opportunity. Save your $650 over time and then purchase by yourself....
Hey Ishan - We actually taught a course on how to find private money lenders and equity partners. A local not for profit had us do it and hired a video crew. The not for profit is now selling the course, here's the link: www.sjreia.org/Page.aspx?ID=Private-Money-Course There are investors right in your back yard. We get most of our investors from our local network and also from referrals from that network.
A Slave to king of Kings to hear more about our investments be sure to subscribe to the newsletter. the link is at the top of out TH-cam page or contact us at www.derosagroup.com
Glad to hear it. To keep in touch with investments and updates from The DeRosa Group be sure to subscribe to our newsletter, here's the link: www.derosagroup.com/mailing-list/
Good video and content, but does it bother anyone else how he takes those wired pauses like he needs something to drink?..lol.. he should work on that..haha
Hi Joe: Funny you should ask! We actually are launching a Coaching Program tomorrow for a start date of September 1st. Many of our followers asked for some formal coaching, so we have put together a program focused on buying rental properties. We will be posting an intro video about the Coaching Program here on our TH-cam on this Tuesday. However, I can email you more information if that would be helpful. Please shoot me an email at info@derosagroup.com and I will send you over information! Thanks for asking and glad you enjoy the channel!
+Derosa Group ok well thats great man that exactly what i need more info to be able to join the coaching program and im about to send you an email also. Thanks
I don't mean this next sentence to come off as disrespectful but you paid over $1,000,000 for a building that produces in actual profits in the the teens? Best case scenario that's $19,999. Let's pretend inflation doesn't exist... that's still 50 YEARS to get your initial investment back? On a single family home I have that I felt like I got REALLY emotional over the deal will have paid the initial loan back including all repairs and upgrades to the property in 11 years. I lose sleep over thinking about what a horrible deal I made. I have to be missing something. This seems like a complete and utter failure of a business move. Can someone explain?
Mr CC19CC88 - we didn't pay cash for the property we laid down 25% and borrowed the rest from a bank. we are making a return in the mid teens on the money we laid down, not the entire purchase price. so that's $250,000 down and assume a conservative return of 15%, that's $37,500 in cash flow per year plus another $20,000 or so in principal reduction (mortgage balance being paid off) each year and you get a nice return that will pay back your investment in around 7 years with a stable appreciating investment. I hope that clears it up!
Derosa Group haha ohhhh. My mistake. I'm not use to seeing people talk about mid teens speaking of percentages. I thought we were talking dollars. Didn't mean for it to come off rude. I was sitting here watching the video losing my mind like what is this guy thinking? Best of luck with your continued business endeavors sir. I enjoyed the video.
Where I come from no one believes in this. It's considered a "pipe dream". The only person that believed in me was my mother when I did my first deal. IDK anyone with money. Growing up in the "hood" has very little perks lol
I feel you Ty Easy...I bought my first duplex when I was 21 years old., while working for GM, in Flint, Michigan. I went on to purchase single family homes, a four-plex, and a 6-unit apartment building. Ans lilke you, the only person who truly believed in me was my mother. Close friends, Co-workers and/or family did not get the "big picture, that I had, in the beginning.
@@HjeanWmsREIMBroker even my mother doesnt believe in me. I have only myself
@@justinfay3011 lmao this made me laugh. Its ok bro. as long as you believe in yourself and work hard i believe you can accomplish your goals. I hope you never give up believing in yourself 🙏
It provides gumption, no education is free
This is my personal page for cursing and watching twerk videos but I am a Real Estate Broker in two states. I have a separate page for Real Estate. I am really thinking about doing the Yoube to teach people about Real Estate. I come across So many people that dont know anything about Real Estate. Also the deal he is talking about is not common. In fact it is so uncommon a lot of people are not willing to work with you. He is right that if you want that kind of deal you are going to have to start building a reputation.
A word of advice, you might try showing the property you're discussing in future videos
A word of advice...dont give advice
@@murderah17 teehee
I love hearing these stories about 18-unit buildings that people bought for a million dollars. Out here in California, a million dollars buys you maybe a decent single-family.
Anyone can make videos in front of power meters.
Buying right on day one makes all the difference, congrats!
My latest post on Bigger Pockets - In this episode we talk about how we bought an 18 unit apartment building with no money out of our pockets. Enjoy!
I am also a member of BP. I said to some one "its not worth the time and headach to manage smaller homes...makes more sense to do one building. Would you agree?
I live in Tacoma where rent has increased the most out of almost every city in the country.
Could you help me finance a complex that had a great Cap rate?
Derosa Group How do I go about buying a house without any money out of pocket in california?
Been listening to bigger pockets and reading to develop myself. How did you network to get to this point? Also what podcast episode were you on? Thanks!
Mesej yang jelas, struktur yang jelas, mudah difahami, terima kasih
you don't say?
Great video! Since this is five years old, I'd like to know how this investment is working out. Do you still own it? If you sold it, what did it sell for? Also, as the GP, what was your equity share?
We sold it for 1.5M, purchased it for 1M. Our ownership was 30%
You are great! Subscribed to learn more about syndications and to start doing them myself.
koryfan thanks!
He just said no money..Then said but used this money over here from family..Lol
None of his money!
No money out of pocket.
Do not rent that is my philosophy i despise renting no offense it's a rip off for the rest of your life. Live in your car if you must because it's a rip off to rent.
I dont agree...
How did you guarantee the mortgage? Do you make your investors guarantee the loan or do you have other assets which value meets the loan size? Or is there another way to guarantee the loan without doing either? I've read up quite a lot but that's one thing which still a mystery to me, how those who want to get into small multis can guarantee the loan if their net worth or assets is not worth the loan size. Did you have a sponsor? If so what do they charge?
+musicandlife1 Hey there - Our investors don't guarantee the loans, we do that as the General Partner. We have 10 years of experience in the business and other assets also, so we are a good loan these days. That being said, perhaps you are just getting started and don't have a track record. One option is to start small enough that your earned income will cover the loan income requirements (maybe a 2, 4 or 6 unit deal) and build up a track record over a year or so. Be sure to use a bank that looks at the asset, like B2R Finance.
Another is to enroll a sponsor as you referred to and give the sponsor some of the GP side. If you are going to be the main active partner don't give too much of the GP side away to the sponsor.
Derosa what do you mean "look at the asset" above
+Matthew Oliver (Sales Manager of CN) Hey Matthew - the bank has to have something for collateral, meaning something that backs up the loan, something they can take if the terms of the loan is unpaid. One thing is the asset they are loaning against. They tend to add in other additional collateral like the credit of the investor. Meaning they can come and take other things from the investor if they can't recoup their debt by taking the asset they are lending on. Loans where the investor has to personally guarantee the loan like this are called a recourse loan. On larger transactions, typically above a million, you can get a non recourse loan meaning the only collateral they have is the property they are putting a lien on.
Nice Matt
Thanks! Here's some free goodies. Just text DEROSA to 66866 for several hours of video training, articles, and other stuff you can't get anywhere else. Enjoy!
Great video , love your content . You should make a video on why its a good idea to do no money out of pocket deals.
Deep Work Thanks for watching and commenting! And great suggestion!! Thank you!!
I’m 23 years old. I’m trying to buy an apartment complex. I don’t have much of a down payment though :/. Is there anything I can do to achieve my goal?
Aaron Betancourt you need down payment plus show of income if you are trying to get a loan
Look for investors brother use other peoples money but take a percentage from it. find someone to invest but you do all the work and take some of the profit make sure it is a win win for both of you guys or more if there are more investors.
Hey Matt! Allie here, I read your book! Great stuff. I have only done equity deals to this point, but want to move on an 8 unit building with only debt, commercial bridge loan 12 months, 75% of purchase price 100% of construction. I need help figuring out how to borrow the other 25% plus closing costs without using the property to collateralize the loan, do you have any suggestions of where to secure the private funds and how to offer structure it?
Awesome, thanks for the compliment on the book! I hope it added some value to you. For what you're trying to do, it sounds like a pref equity structure would be the best. That way, investors have collateral against the company that owns the property, not the property itself. They get a flat rate of return on their money, and they are first paid before you get paid. Hope that helps
Cool video. I hope to graduate from SFRs to an apartment building someday.
Thanks for watching Mike! I hope you do also. Make a plan and stick to it, you will get there.
Take care,
Matt
Derosa Group
This was of great value to me. My question is how to I get my foot in the door? I have no experience in this area and I’d like to some day to commercial real estate. Do I need to become an agent? Get a certification or just attend some conferences to get my foot in the door? Thank you.
Hey, Matt in what state did you buy your 18 unit apartment building.
John Howard this particular building is in Philadelphia, PA.
Great advice Matt. Thanks for taking the time to post these videos they really help fellow investors understand how it can be done
Michael Rossi you are welcome!!
Great video, I sell real estate in NYC and own my apt out right. I'll be investing shortly, my issue is can't seem to get a mortgage because my income is inconsistent, such is life. Your investors, it seems similar to investing in R.E.I.Ts, very interesting approach.
Hey Tony - Syndications are similar to REITs but there are 3 distinctions - 1) they are not publicly traded meaning you can't get in and out as easily by selling or buying shares on the market. 2) the price to buy in is higher than REIT prices 3) you have to be an accredited investor to participate (this rule is changing soon).
For that apartment you have, consider doing a line of credit with that as collateral. If a Home equity line doesn't work try a business equity line. Most smaller banks in NYC will talk to you about it.
Good luck!
Hello I’m looking for some private investors in a six unit property, do you have any suggestions?
Check your own network, and of course us let Matt's book as a guide!
www.biggerpockets.com/privatemoneybook
how much do your investors get? I mean what kind of cut do you take for being a manager of their investments?
tom jens great question. We calculate our "carve out" based on the return investors will get on their money with their share. Our target is to get investors a return in the mid teens once the property is stabilized. On this deal, our share is 30%.
I like when it is simple/straightforward. Some companies have "asset management" fee, then profit sharing, then some other "fee". Why not simply have one simple cut, no need to over complicate. On the other hand they are probably thinking that they want to have some fees even if zero profits were made at some year :)
What if your willing to pay the down payment out of pocket?, should you still go at it alone?
Kevin Edwards there are plusses and minuses to doing deals by yourself but if you are just getting started I highly recommend investing with your own capital first to get a track record going.
Derosa Group thank you for your quick response.
This is great information, thanks for your time and efforts
Hani Kazmi Appreciate your note! If you ever have any real estate questions please feel free to email them to us - helpme@derosagroup.com and we will answer them on an upcoming Mentorship Monday episode! :)
Hi, how do I find these commercial brokers who have these blocks of apartments for sale?
Start on www.loopnet.com
Minus investors, do you think it would be a good idea to purchase and repair a rental property cash can or is it better to take a small loan even if you have the cash? Why?
Michelet Fleurant it depends on the source of the loan and the source of your cash. money is so "cheap" to borrow right now, if you can get it from a bank you can't beat the rates. if its private money at 9 to 11 percent and you have the cash, use your cash. then refinance into a bank loan to get your cash out when the renovations are done.
Thanks for the video and channel.
Thank you for sharing such helpful information! Do you utilize an outside property management company or handle the management in house?
YW. At this point, we have many units over various states, we outsource all property management to third party vendors.
Thank you for posting this video. I am interested in knowing how your structured the deal for your investors. Did you agree to pay them a quarterly payment at an certain interest rate plus a percentage of ownership in the property? If so, what was the interest rate and what was their percentage of ownership?
What's the first steps I should take in Boston MA about buying commercial property?
SOLER try going to www.biggerpockets.com, setting up a profile, and connecting with others in your area.
I would get entrenched in your local network first - connect with local commercial brokers and investors to get your ear to the ground on good deals.
Was this building also located in Trenton NJ? I'm interested in getting into a 5+ unit multifamily soon, but I live in Westchester County, NY and the prices are rediculous. Where do you start to network to find the listings? Loop.net? Thanks
+Karl Tech It was in Philadelphia. I use Loopnet as a networking source, a way to meet agents that are active in your target area. Typically the deals are not great because the good ones sell before they get to Loopnet. The trick is to get an agent to give you first look. If you are in Westchester I have heard good things north of you, in Albany and other post industrial towns along the Hudson.
How old was this property when you bought it?
Built in the 1970's I think
Golden Advice! God bless you!!
Thanks Mike! And you also!
It worked because you already owned props and they felt comfortable with getting you into the deal.
You are correct - it's all about developing a track record!
Matt Faircloth
but if I find a good prop, then I have to go though mess. So i am looking for other avenues
Thanks for sharing. Was this a pocket listing from one of the commercial broker you networked with, or was it already listed on Loopnet?
Hey Steven!
Yes this was an in house listing with the commercial broker. It took me a while to get him to take me seriously but once he did he gives me first dibs on deals when he gets them. In my experience, once a deal gets on Loopnet it's already been passed on by the brokers inner circle and the inner circle of all the agents in his office. I rarely see good deals there but have found that its a good place to network and find an agent that is working in the area you are farming.
I hope that helps!
Matt
Excellent video, thank you!
Nice love the video
Very informative looking in that Direction of the discussion 👍
May i ask? let say you start whit small 4,5 unit aprt rite? what about if u got more money to buy 18,14 unit rite way not a 5 what u will do?.Reson why i ask im Truck driver i got money so im think about do same way just dont know how to start,buy 4,5 unit or 24 rite way.Pliz give answer if u can thank you
osm osm Hey! Thanks for the comment. Sorry for the delay! Hit me up on Bigger Pockets, I have a bunch of other stuff out there. The link to my profile is in this videos' description.
If you have that much money to start with, then you have the option to take down the bigger asset (18 to 24 units) and put a property manager on it for you on day 1. It doesn't make sense to use a PM on a smaller deal and some won't manage stuff less than 10 units, and the ones that take deals like that may not do it effectively. It also depends on your end goal. If you are looking for some side income while you continue with your day job then doing a passive investment like that may be the ticket. If you are looking to become a full time investor / landlord then you may want to manage yourself at first to learn the ropes, if you can swing that. I hope that helps!
Matt
Thank you so much
+Derosa Group what are your thoughts on investing out of state, i am currently in NYC where it's way too expensive
Hi Joel - It all goes back to management and having a local advocate. We just looked at a 50 unit in central PA and will probably be doing that deal because we have a manager in place and an investor that is local to that market! We are always looking at great deals so if you want to hear more shoot us an email at info@derosagroup.com or look us up on www.BiggerPockets.com. Take care!
Sensi how do you put apartments on contract and what I need to do so I can pay for training with your training after my first deal because I only work twice out the week because I'm over qualified, how do I create a track record on myself with a single family home and what's I say to investors and it's slot of vacant apartments in Columbia SC with no money down
im intrested in real estate i have a multi million dollar idea with no where to start kinda this is like a dream job for me hoping i succeed i got faith in myself
dragon flow'e.n.t a good place to get started is to get a strong WHY that you want to be in this business, outside of making money. then set some 1, 3, and 5 year goals. that will give you a bit of a compass to guide you.
Derosa Group thanks
Great info. lots of Value
Thanks, we appreciate it!
Not sure if you guys are still responding to comments. How would you start working to meet with investors to try to get into another multi-family?
Hi Ed! Absolutely, we still Monitor and respond to comments regularly. Thanks for leaving one! We have several different efforts for staying in touch with our investors, and enrolling new ones. Some efforts we do our a monthly newsletter, and Live Events. You can hear more about what we do on our website www.derosagroup.com, and we go deep dive and all this stuff in a recently released book, Raising Private Capital!
I'd like to get into this one day.
Khaled Miah but buying the complex would be much wouldn't it?
How many beds and how much are renting for?
Sohail Kaisar there are studios, one bedrooms, and two bedrooms with 24 beds total. unit rents range from 600 for a studio to 850 for a 2 br.
thanks
Derosa Group 850 for a two bedroom? Here in california we are paying 1,500 for a two bedroom and $800-1000 for a studio.
When you bring in investors how much money do you pay them back and how frequently?
Jamel Turner we typically pay our investors once a quarter, and their payment has to do with their percent ownership and the current cash flow on the property.
Where is your market?
Great video
Rafael Rosado glad you enjoyed it!
The 18 units for my teams in fangtech they own the 18 units by deducting their pay with 0 interest on me the ownership titles be return to them when the deduction end.
Great video but I have a question, how do you depreciate the apartment building, and if that brings a plus to your cash flow.
We actually just shot a video on this that will go out for a future Mentorship Monday, thanks for asking and Stay Tuned!
hi sir, will you consider investing in Cebu Philippines ?
John Paul Paquibot Cebu Real Estate we only work in the USA for now, sorry!
its okay sir... no problem
Where please. I need
Go to our website we can help you do this too!!
I found a building I am interested in a six-unit apartment can I bring you in as the buyer I have no idea of what I am doing so if I can get you in as a partner I would appreciate it
How difficult is it to get an attorney to have lunch with you to discuss like you said the legal structure of you LP?
+Nickie C Hi Nickie - All you have to do is ask, LOL. If you are going to do a deal then you should be willing to hire that attorney for a fee to help you structure the deal. I would look to build your network of professionals before you have something under contract so that you can move quickly when the right deal comes along!
My question is how do you build your professional network in the commercial real estate (multi-family) industry? You mentioned finding someone to let you participate in open houses and look at financials for buildings that are up for sale. How do you find these individuals?
"How I bought an 18 unit apt starter pack"
A) had my mom tap into her retirement and lend me the funds for first buy
B) waited for mom to die and cashed in on the inherited assets
C) I was born with money
For us, it was "None of the Above". We went with D) Work hard to build up a track record of our own deals, then approach potential investors that wanted to make a good return on their money to partner with us. Repeat, tweak the process, and repeat again until we had enough investors lined up to do a deal of this size. It took sweat and time, but it was worth it.
I should say that everyone knows people with money and can do exactly what we did. Here is a link to learn more about a course Matt Faircloth taught through the local REIA club. They have it priced at $297 to take it online. Check it out!
th-cam.com/video/jpFgUWOXTuM/w-d-xo.html
Hi there, just curious, as a silent partner what kind of rate of return do you think a guy could make when he has someone like you manage it for him? I had a windfall as a teen and I'm 20 years old now, in college, and I wanted to get into real estate. Thanks!
+Austin Luepkes it depends on the deal. This particular building is doing well, with a return in the mid teens. to hear more about our projects shoot us a line at info@derosagroup.com
Sounded like he started with smaller properties and then leveraged that equity/cashlow to secure larger investors for his 18 unit.
Lmfaooooooo at B
Hi Matt, thanks for sharing! what would happen if a person had that kind of money but had never done a deal, still do the track record and get to know the commercial real estate guys? I'll definitely be checking some more of your videos thanks
Hi David,
Great question. Liz here (Matt's wife and business partner). I can certainly answer your question so I figured I would jump in and get back to you as quickly as possible! If a person has money put aside to do this size of deal and has no experience, there are a few ways to move forward. My first question to this person would be - what is your long term goals? Do you want to be an active investor (someone doing this business full time eventually) or do you want to be more of a passive investor (invest with someone else and keep your day job). There are many paths to wealth so it depends first on this person's goals. My suggestion would be to find someone who has the track record and established relationships to mentor this person through finding, evaluating and closing on a similar sized deal. This can be someone who takes a percentage of the deal, becomes an equity partner, or simply gets paid for their time. I have seen it work more effectively if they are an actual partner in the deal, that way this person can lean on their track record in order to secure private money and traditional money. For example, we just closed on a 49 unit building. The bank we ended up working with completely vetted us out. They of course vetted the deal out before agreeing to finance it, but they vetted our track record out, our resume, other deals we have done. They are investing in the building as much as they are investing in us. So, the greatest thing this person can do if they don't have a track record is to build a track record with smaller deals first and work their way up. Or partner with someone who brings the track record to the table. I hope this helps answer your question!!
Moving forward, if you have ANY RE investing questions, please send them to helpme@derosagroup.com and we will answer them on an upcoming Mentorship Monday episode!! Thanks!!
Amazing
How old were you when you got started?
How does someone write a business plan for a adventure like this?
Dominique Summers One of the best business planning books out there is called the One Page Business Plan by Jim Horan. He has a bunch of versions but I like the original one the best. It is simple and a great book that guides you through the process of actually writing a business plan. I would highly encourage you to pick up a copy. I think you can get it on Amazon. Good luck!!
How much the apartments cost $$$$
what was your ROI?
Hi Jacob - Stabilized cash on cash return is around 15%. So far our IRR has been close to 20%
I would to like own a apartment building or multi family investments. How would you suggest one get started in this area. maybe by networking or getting a real estate licence? I live in Michigan btw. Thanks for the advice.
Griffin Henry 3 network, get out there to some REIA meetings, set some goals, and make it happen! and yes getting your license would help too
Hey man, that was extremely beneficial. Thanks for sharing. Which state are you in?
Ahmed Hamed We are based in Trenton NJ and this building 8s located in Philadelphia. Thanks for watching our videos and commenting!! Let us know if you ever have a question for our mentorship Monday series. You are welcome to email us at helpme@derosagroup.com :)
We are in New Jersey
How can I buy a 20 unit apartment complex from a family member they want $2million dollars
Where u at i wanna go
i am a beginner (dont own no real estate ) should i start with a house before an apartment
and besides utube where can i learn the business
jose cruz you should definitely start small, maybe buy a 2 or 3 unit and live in one and rent our the others. you can learn a lot about real estate on www.BiggerPockets.com, check it out!
Derosa Group okay thanks for the reply I will
For an apartment building of this size, do you need to have someone that works there? In the future I want to be a landlord but I really don't want to have to hire employees.
Capn_Wreckz you don't have to have an on site manager (some call this a super). You should have a dedicated maintenance support team but your management company can have that set up on their side.
I don't understand why someone would go into a deal with a bunch of people then split the profits 8 ways? Your original cash flow will be like $6000\8= $650 😦
+noe name Remember my friend "Cash is the worst investment" wise words from Warren Buffet. Its better to get cash flow generating instead of letting cash sit around to get fucked over by inflation. I would rather get $640 a month for a 10000 investment. Then having my 10,000 respectively be worth $7,200 in the next 10 years.
+Maui AF You hit the nail on the head. It's all about the return on investment! The investor ownership of the property is based directly on how much they put in, so it's no about the dollar amount of the return it's about how much the overall deal is making which is reflected directly back to them.
Cy: In a limited partnership, the general partner normally charges a respectable fee for services rendered.
Hey Cy - normally the GP takes an equity stake so that they are tied to the profit on the deal. As long as the LP's get plenty of ownership for their cash in the deal it's a good partnership. I don't like GP's taking a fee only for putting the deal together, I think the GP is motivated to perform if they have some ownership too.
That's an extra income of $650 for how long...The next 20-30 years. If you can't afford to do it alone why pass up an opportunity. Save your $650 over time
and then purchase by yourself....
where to find investor ? in MD
Hey Ishan - We actually taught a course on how to find private money lenders and equity partners. A local not for profit had us do it and hired a video crew. The not for profit is now selling the course, here's the link: www.sjreia.org/Page.aspx?ID=Private-Money-Course
There are investors right in your back yard. We get most of our investors from our local network and also from referrals from that network.
Derosa Group
how much you pay the investor on the 500 k
The investor return is in the mid-teens, so the $500,000 is making around $70,000 per year.
Ok am interested
A Slave to king of Kings to hear more about our investments be sure to subscribe to the newsletter. the link is at the top of out TH-cam page or contact us at www.derosagroup.com
Glad to hear it. To keep in touch with investments and updates from The DeRosa Group be sure to subscribe to our newsletter, here's the link: www.derosagroup.com/mailing-list/
Audio seems off.
Good video and content, but does it bother anyone else how he takes those wired pauses like he needs something to drink?..lol.. he should work on that..haha
Hey do you have an one on one coaching program
Hi Joe:
Funny you should ask! We actually are launching a Coaching Program tomorrow for a start date of September 1st. Many of our followers asked for some formal coaching, so we have put together a program focused on buying rental properties. We will be posting an intro video about the Coaching Program here on our TH-cam on this Tuesday. However, I can email you more information if that would be helpful. Please shoot me an email at info@derosagroup.com and I will send you over information!
Thanks for asking and glad you enjoy the channel!
+Derosa Group ok well thats great man that exactly what i need more info to be able to join the coaching program and im about to send you an email also. Thanks
I got to 1.14 minute and stoped watching ,we borrowed money from family !!! What a fuck ? Is that no money down ?
He said, No money out of pocket.
This video is a joke. He has family to give him money. Not very independent at all.
No family, just people who believe in me. You have these people around you also, my book Raising Private Capital tell you how to find them
He lying
I don't mean this next sentence to come off as disrespectful but you paid over $1,000,000 for a building that produces in actual profits in the the teens? Best case scenario that's $19,999. Let's pretend inflation doesn't exist... that's still 50 YEARS to get your initial investment back? On a single family home I have that I felt like I got REALLY emotional over the deal will have paid the initial loan back including all repairs and upgrades to the property in 11 years. I lose sleep over thinking about what a horrible deal I made. I have to be missing something. This seems like a complete and utter failure of a business move. Can someone explain?
Mr CC19CC88 - we didn't pay cash for the property we laid down 25% and borrowed the rest from a bank. we are making a return in the mid teens on the money we laid down, not the entire purchase price. so that's $250,000 down and assume a conservative return of 15%, that's $37,500 in cash flow per year plus another $20,000 or so in principal reduction (mortgage balance being paid off) each year and you get a nice return that will pay back your investment in around 7 years with a stable appreciating investment. I hope that clears it up!
Derosa Group haha ohhhh. My mistake. I'm not use to seeing people talk about mid teens speaking of percentages. I thought we were talking dollars. Didn't mean for it to come off rude. I was sitting here watching the video losing my mind like what is this guy thinking? Best of luck with your continued business endeavors sir. I enjoyed the video.
Mr CC19CC88 no worries, no I see where your confusion came from. Glad I could clarify and glad you enjoy the videos!
Thanks for the tips,
you are welcome - thanks for watching!!