MultifamilyJunkies

I buy apartment buildings.
$200mm portfolio. 24% annual growth for 17 years.
Follow for real deal numbers - how I buy and run them.

[MultifamilyJunkies @multifamjunk]

Two brothers inherit $1,000,000 each.

Brother A hates debt. Buys a $1M property in cash. Collects $10k/month. Sleeps like a baby.

Brother B uses leverage. Puts his $1M down on a $5M property and borrows $4M. Collects $50k/month - $25k after debt service.

10 years go by. Real estate doubles.

Brother A: $2M property, $20k/month. Nice and safe.

Brother B: his property is worth $10M and the loan is down to $3M.

He refinances to $8M, pays off the $3M, and pockets $5M.

He rolls that $5M into a $25M property.

Final score after 10 years:

Brother A: $2M in real estate, $20k/month.

Brother B: $35M in real estate, $350k/month in revenue - 175k after debt service.

Same inheritance. The only difference was leverage.

Debt on cash flowing assets isn't risk. It's the whole game.

[MultifamilyJunkies @multifamjunk]

@btbwarmousa @grok I have a lot of friends who say the same thing

[MultifamilyJunkies @multifamjunk]

Hey @grok if you had $500,000 and had to buy an investment property right now, what would you buy?

[MultifamilyJunkies @multifamjunk]

Here is what I would do

Use the 500,000 as a down payment on a 5 to 15 unit building in a nice area that’s not being run well.

Cut the waist raise the rents an ad value to the property by increasing the bottom line numbers.

Refinance the property in 12 to 24 months and pull out your down payment hopefully more and rinse and repeat.

@grok answer is good, but not gonna get you the most value.

[MultifamilyJunkies @multifamjunk]

@RockoDoyle @heavyequipguy1 @grok Too much work to do both?

[MultifamilyJunkies @multifamjunk]

@robertgg I like that you are honest about that.

[MultifamilyJunkies @multifamjunk]

This is exactly why I hate using 3rd party property managers.

I have one complex that I can’t manage in house at the moment.

Manager says a water heater is down and we are using a backup water heater for 8 of the units.

She said the best quote she got was $27.

I said $2700 is a little high for an 80 gallon tank but I’m fine with it you can go ahead and install it.

She says no, not $2700, $27,000.

I don’t even understand the balls someone could have to quote that price. It is so absurd.

At the time I didn’t realize it needed to be a commercial grade which my plumber said he would do for $4500.

But seriously. Manage in- house. Your manager isn’t helping you make money.

[MultifamilyJunkies @multifamjunk]

@coachdeesmith the materials is a water heater. https://t.co/Q0VBgu4iXI

[MultifamilyJunkies @multifamjunk]

@CompoundForever Good idea. At the very least every decision involving a big cost should go to the owners.

[MultifamilyJunkies @multifamjunk]

@ThinkAppraiser Just as bad as yours

[MultifamilyJunkies @multifamjunk]

@kurtaknowles Plenty of good ones that are lower cost. Even if you did put in one for 6k, 21k in labor?

[MultifamilyJunkies @multifamjunk]

I agree. I’ve done that before for other issues and sometimes it is better to go to small claims even if your giving up some of what your owed for it. I find that other way judges don’t want to deal with cheating the case and send you into mediation. You don’t have an agreement they send you back again. You see that happen a lot?

[MultifamilyJunkies @multifamjunk]

@RE_Ari18 I think that’s fair advice. Though, It’s not nearly as bad as a trader and his wife have it.

[MultifamilyJunkies @multifamjunk]

My Amex platinum is great. I pay a shit ton of money just to use it. Only to get half the points back of any other card. And they even let me get a free $50 at Saks every 3 months which can get me nothing more than one of their many colored napkin holders.

Why would anyone use anything else?

[MultifamilyJunkies @multifamjunk]

@heIpfullandlord Sports betting?

[MultifamilyJunkies @multifamjunk]

This trickling into the single family home market?

[Jon Brooks @jonbrooks]

Florida condos are entering a balance sheet crisis.

40% of owners hit with special assessments in just 3 years.

Some buildings: $134,000–$400,000 PER UNIT.

This is not a normal housing correction anymore.

[MultifamilyJunkies @multifamjunk]

@jonbrooks I get that builders are having a tough time selling, but why do you think people are paying more for older homes right now than newer ones?

[MultifamilyJunkies @multifamjunk]

At some point real estate will hit equilibrium again.

There are many more sellers than buyers right now, but life happens and people circumstances will change.

I wouldn’t jump into buying just yet.

I think we still have a year or two more before single-family home prices start coming back up again.

[MultifamilyJunkies @multifamjunk]

@lawyer4SMBs Usually yes. I think we are in a timeline the market when it’s not very good. I would wait on SFH investments right now

[MultifamilyJunkies @multifamjunk]

I should say, the majority is in options of those companies

[MultifamilyJunkies @multifamjunk]

By far, the worst day I ever had in the stock market.

$BE

[MultifamilyJunkies @multifamjunk]

@Bthechad The majority of my account is in $Be and $AMZN