Table of Contents
Chapter 1 Introduction to Multifamily Ownership 1 Introduction 1
Holistic Approach 2
Background 4
Market Outlook 6
Regional Trends 9
Chapter 2 Advantages of Multifamily Ownership 13
Time and Efficiency 14
Market Liquidity 15
Transaction Costs 16
Concentration of Units 17
Management and Labor Considerations 17
Tax and Record Keeping Considerations 18
Divestiture of Property 18
Chapter 3 Bridging the Gap 21
Strategies 22
Leverage—The OPM Principle 23
Clearly Defined Objectives 24
Maslow’s Hierarchy of Needs 27
Conquering Your Fears 29
Chapter 4 The Value-Play Strategy 35
Buy and Hold versus Buy and Sell 36
Ten Ways to Create Value 39
Diamonds in the Rough 47
How to Tell a Diamond from a Lump of Coal 61
Chapter 5 Establishing Your Niche and Locating Properties 69
Establishing Your Niche 70
Availability of Resources 70
Property Size 71
Property Age 74
Holding Period 79
Chapter 6 Six Ways to Locate Properties 85
Real Estate Brokers 86
Classified Advertisements 87
Industry-Specific Real Estate Publications 88
Local and National Web Sites 88
Associations and Real Estate Investment Clubs 89
Banks 89
Chapter 7 Financial Analysis 91
Valuation—How Much is That Property Really Worth? 92
Two Crucial Principles That Saved Me $345,000 93
Valuation Methodologies 95
Financial Statements 102
Five Key Ratios You Must Know 117
The One-Minute Assessment 124
How to Read Between the Lines 125
Chapter 8 Case Study Analysis 129
Case Study 1: 52 Units in Flint—My Way or the Highway 129
Case Study 2: 12 Units in Saginaw—Below-Market Rents 142
Case Study 3: 16 Units in Beaumont—A Banker’s REO 151
Case Study 4: 98 Units in Houston—Creating Synergism through Consolidation 162
Chapter 9 Negotiation Strategies and the Due Diligence Process 175
Five Cardinal Rules of Successful Negotiation 176
The Due Diligence Process 185
Chapter 10 Financing Your Acquisition 191
Traditional Financing Alternatives 192
Secondary Financing Alternatives 203
Additional Financing Considerations 206
Chapter 11 Closing the Deal 215
Closing Fundamentals 216
Closing Credits Can Add Up 219
Chapter 12 Managing Your Property 223
Hiring a Professional Property Management Firm 224
Your Role as a Strategic Manager 227
Expect the Unexpected 228
Chapter 13 Four Effective Exit Strategies 233
Outright Sale 234
Refinancing 235
Equity Partnership 245
Exchange of Properties 248
Combining Methods 249
Chapter 14 Five Keys to Your Success 255
Understanding Risk 256
Overcoming Fear of Failure 259
Accepting Responsibility 261
Willingness to Persevere 264
Defining Your Sense of Purpose 267
Appendix A: WWW.THEVALUEPLAY.COM 273
Appendix B: WWW.SYMPHONY-HOMES.COM 275
Glossary 277
Index 297
