BUYING AN APARTMENT COMPLEX IN ROUND ROCK, TX (2023)

Introduction

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Content

Okay, what's up everybody welcome to the video so in this video it's a little bit of an interesting one.

A few months ago, Matt and I and a big group of people went and we toured an apartment complex that we were looking to acquire, didn't do a whole lot of I guess talking during this video, but we did a walkthrough of it and so, as you guys are watching this video we're gonna be explaining the video.

So, let's dive in okay, the great apartment complex in Round Rock that we're looking to acquire it's over 20 units, I think it's 24 units total and so right now we're going to walk through so we're walking through every single unit in the complex to see kind of what shape they're in what we'll need to do to add value to this so I'm here with that and then a bunch of people through professionals that we could potentially go in on this with and we need their professional advice.

So we'll see you guys inside so who all I guess who all showed up to that yeah.

So that was the team that we put together for the due diligence and that consisted of contractors, insurance agent and then a couple of my buddies at our investors, and so I brought them along to give you some notes where they thought we could add value and try to be creative insurance to kind of understand the condition of the property and see what the quote would be on actually, insurance for the property rent and then maintenance to get bids on replacement costs and what we might need to do inside of each unit time.

Okay, cool and have you find this puppy in the first place? I found it from a broker? Okay, it was a it's interesting cuz, it's not like listed on MLS, but I was just reaching out to different brokers for last couple months.

It eventually somebody called me and said they had a deal that they thought might be a fit for what I was looking for and then kind of just analyzed it for six or seven months, really and then came back around and got it to a price that I wanted it to be so I'd put under contract, and then we had 30 days to do diligence, which is what we're doing in this video uh-huh.

Do bigger commercial, I! Guess it's! You know, it's consider commercial, even though it's a you know an apartment complex.

Is it six or seven months? Is that usually standards for like a deal to to work itself out? You know all over the place ever deals differently.

Yeah yeah, I would say, probably not in Austin, usually have to go quicker, but I would say that it usually takes about six months to actually get a deal done.

Okay, yeah friction from first time you see it's actually closing it right, yeah and then you said 30 days for due diligence.

Is that standard? Yes, anywhere from 30 to 60 days, I'll go do diligence and then you'll do like 30 or 60 days to close okay, so typically you'll get about 120 days total from the day you sign it to close it yeah, okay, cool! Well, let's just first point out how your hair is just oh yeah, yeah, that's awesome all right, so this was just one big building.

There's there's two stories: yeah 2040 units at that correct 24 units and that's the property manager, and so that's a big part of this is we've got to go and pretty much look at every single unit and obviously there's people living in a lot of these try to be efficient.

But at the same time you try to get pretty thorough notes right because you don't want to have to do it again for sure yeah so also like walking in on.

You know, people that obviously you're currently living here.

That's just you know we're trying to be quick, but also- and you said like make sure we're actually looking at everything, yeah and respect their time and right, I've done this before.

Where you you can't get into some of the units and that's kind of frustrating, because you set this up, and you get all these people out there.

You really want, to see everything and so having.

A good, property manager is actually really important, something that's like we're getting in, and you have to be kind of aggressive, sometimes yeah first time so it was good.

We got in every single unit yeah, and this was in this apartments in Round Rock, and would it be considered a B class or C class? It probably a c-plus yeah yeah, okay, yeah I mean I, don't know if I mean there are some records, maybe rougher parts around Rock but I think anything in Round Rock cake isn't as bad as like yeah.

Well, some people would imagine.

Yeah it's more.

So I think there's like you.

Can you can rank tenants and the property and it's more so kind of based on the age.

There's a little bit older.

Yeah, then it's not a beer.

A right! You know it's brand-new.

B's! I'd! Say probably 1990s yeah this was I! Think in the 70s? Oh wow.

Yeah well, I, look great for the second yeah.

They did a lot of renovations on the outside yeah we're going through these units to see what kind are you, but they can't run me so we're going through these units to see what kind of renovations are going to make, because potentially we want to add that so that we could increase the rents to create more income from these units right now, they're anywhere from eight fifty nine thousand and we'd like to get them up to a thousand.

You know a thousand fifty turn out all right now we're seeing what all around to put into that no to make that happen, and if it's worth it, okay back to the tour.

Yes, we got a tour.

You know the property manager talks about it a bit.

You know a lot of the units were similar, but there was some differences between unity and like yeah, where they was there was like they had use made me different tile, anything that learn and man.

This is intense, going through all these units, taking a lot of notes, it's hard to keep it organized, but you got to go slow and luckily it's only 24 units, 200 I'm screwed, it's true I've done out of 200 and you gotta have us get software just subtract all this yeah.

You can't just probably like 200.

You probably can't just take like no time I pad like right right, exactly yeah, this guy's, the night sky for the property.

So it's nice because he knows a lot more about it than we do right yeah.

He was everybody's best friend, oh yeah, quite the show.

So Kyle was saying that you would probably wait to do a make ready on this, because you have other vaping units or would you get started on this like now so I'm, just gonna strip? From my perspective, I have six basically like 60 days, I'm wondering if how many behind this.

So this is going to be Lee and that just depends on how quickly so cabinets are being delivered.

Tuesdays and so we're gonna have some general contractors come in, and so it may be a week or two he's got it on his radar that they're coming for them in a vacant unit.

Actually one of the next we'll get into you'll see a bunch of supplies in there that are gonna, go towards some of the make gratings so you're asking like with the make running process on the baking units like what, basically, what are you gonna buy like? Is it gonna be ready before that 60-day due diligence period is up or not yeah see if they're actively marketing it right? Because if you, it means you, because you had agreed on a price right and then it would be better if those had gotten filled up between now and then right, yeah I mean there's all different ways to look at it, because you kind of want to come and put your game plan in play and get your type of tennis in your chair, but also the income being as high as it can is helpful right.

You have to balance those two out yeah for sure.

What did you think about the property itself? I love it man, yeah I, love the location.

They did a lot of work on the outside yeah new, paying the roof half of new a sees that numbers were not as good as we thought, because it was ended up being six vacant units.

We thought there was three mm-hmm, no something had to work through yeah, it was clean - yeah, yeah I mean I've, seen some properties.

If there's trash everywhere, it was compelling pick up and doesn't like either the tenants were great or they had a good system in place.

Where um did that mean? It's got live on-site? No, he didn't oh well, then, and it was whatever they had going on with yeah.

It's good yeah seemed like good and working-class tenants right.

Most people were at work.

You know when we did this to her think it was like 9 o'clock or 8 o'clock, so I'm like in the morning.

That's right yeah.

So this property in Austin, like Central Austin, would be like rough because it was in Round.

Rock, like at least I mean I, don't know yeah.

That good haven't even approached the price to know for sure, but this would definitely probably be on the leader in inspector this one.

That's it yeah.

We had a bigger crew than most people, yeah, there's about there 10 or 12 people on there yeah and then we you ended up not acquiring yeah, we're you wholesale bit: okay, cool yeah, it's the first time I ever assigned a contract and yeah I thought about that before I, put it under contract and left that open as an option he's not put time key real estate and or a sign says, the buyer.

Okay home found a local group that syndicated it and they actually closed on it and I.

Think it's going well, that's awesome! Yeah! So did you not want to acquire it for any particular reason or did it? What was the I guess? They're just kind of weighing like different options that I had at the time of other deals, I had and then the opportunity to to wholesale it in to make some money sure by putting no money into it.

So it was pretty good.

It was a lucrative deal yeah and was able to still we value for the next buyer.

But yeah I mean my intentions at the very beginning: we're definitely to buy it then I started thinking about it and I was like man if I do buy this I'll probably use up most of my cash.

Okay, probably take me 2 to 3 years to start getting a decent amount of that back right and then you know I'm gonna do a guy something like well I'm, not gonna.

Have any other deals to do for a while sure making the quick cash on the assignment to then go maybe find this again and use that money to buy it and really have none of my own or old capital, but new capital invested would be price yeah or go just find 10 new single-family homes, so it was just kind of weighing all the options and I felt like that was the best decision for this deal.

Yeah for sure.

That's awesome, cool, um! Well, anything else on our apartment like that.

Well, I think it's just you know happy to help any way.

I can but I keep it pretty simple.

When I'm analyzing them I put a value that I think is on the property and I try to buy it below that value right.

That's what allowed me to have the opportunity to assign it sure and then typically an apartment, complex is run from 42 to 50% expenses.

So you can take the rent.

You know back out, 50%, that's what your expenses are going to be.

If you're managing it efficiently, then you can run your debt numbers to see.

How much are you gonna? Have the bank every month and see? What's what's the spread on the cash flow and right- whatever alright? And if that lines up, you feel comfortable and like the property, then I'm like hey, do the deal right, yeah, okay, cool all right! Well, if you guys have any questions, comments or concerns comment them down below, let us know we're having to make a whole video about a certain topic or just reply in the comments.

Thank you guys so much for watching, learn to like comment subscribe and share this with your friends.

We appreciate you guys: okay, thanks guys, yeah.