Multifamily Flipping and Due Diligence Tips to Save Thousands with Nathan Tabor | BP Podcast 349

TL;DR

Nathan Tabor shares insights on apartment flipping and due diligence.

Transcript

this is the bigger pockets podcast show 349 you're listening to bigger pockets radio simplifying real estate for investors large and small if you're here looking to learn about real estate investing without all the hype you're in the right place stay tuned and be sure to join the millions of others who have benefited from bigger pockets calm your h... Read More

Key Insights

• Nathan Tabor stumbled into real estate by accident, initially buying an 18-unit apartment complex that led to significant profits.
• Due diligence is critical in real estate investing, and Nathan emphasizes verifying zoning and other legal aspects to avoid costly mistakes.
• Nathan's niche is apartment flipping, where he buys, renovates, and sells multifamily properties for profit, particularly during favorable market conditions.
• He advises new investors to niche down, become experts in their chosen area, and create a detailed business plan to attract investors and deals.
• Nathan warns against trusting rent rolls blindly and stresses the importance of verifying income and expenses independently.
• He highlights the importance of having a clear vision and plan, which helps in gaining confidence and attracting support from others.
• Nathan shares a strategy to renegotiate deals by using escrow to address seller claims, ensuring both parties are accountable.
• He emphasizes that successful investors don't take 'no' for an answer and continually seek opportunities to make deals work.

Questions & Answers

Q: How did Nathan Tabor get into real estate investing?

Nathan Tabor got into real estate investing by accident. He was initially involved in other businesses when a gentleman offered him an 18-unit apartment complex that the bank was about to take. He ran the numbers, realized it was a good deal, and secured 100% financing and renovation in 2006, leading to a significant profit on his first deal.

Q: What is Nathan's approach to apartment flipping?

Nathan's approach to apartment flipping involves buying underperforming multifamily properties, renovating them, and selling them for profit. He focuses on due diligence to ensure he understands the property's value and potential issues. Nathan also emphasizes the importance of timing the market, buying when prices are low, and selling when they are high.

Q: Why does Nathan emphasize due diligence in real estate investing?

Nathan emphasizes due diligence because it determines the success or failure of a real estate investment. He shares that the money he has made or lost comes down to how well he conducted due diligence. This involves verifying zoning, checking rent rolls, and ensuring all aspects of the property are thoroughly inspected to avoid unforeseen costs.

Q: How does Nathan suggest dealing with rejection in real estate?

Nathan suggests not taking 'no' for an answer and continuously seeking opportunities. He advises investors to have confidence, ask the right questions, and not be discouraged by rejection. Instead, they should learn from it and refine their approach, as successful investors are those who persist despite setbacks.

Q: What strategy does Nathan use to renegotiate deals?

Nathan uses the strategy of escrow to renegotiate deals. If a seller makes a claim about a property's condition, Nathan suggests putting money in escrow to hold both parties accountable. If the claim holds true after a specified period, the seller receives the money; otherwise, it goes to the buyer, ensuring both parties are protected.

Q: Why is niching down important according to Nathan?

Niching down is important because it allows investors to become experts in a specific area, making them more attractive to brokers and investors. Nathan explains that having a clear niche and business plan helps in gaining confidence, attracting support, and identifying opportunities that align with one's goals, ultimately leading to success.

Q: How did Nathan negotiate a significant discount on a property?

Nathan negotiated a significant discount on a property by conducting thorough research and presenting a detailed offer. He assessed the property's condition, renovation costs, and potential value, then submitted an offer with supporting documentation to justify the lower price. This approach led to the seller accepting his offer without a counter.

Q: What lesson did Nathan learn from his deal with the 56-unit complex?

Nathan learned the importance of presenting a detailed and personalized offer when negotiating a significant price reduction. By providing a comprehensive breakdown of the property's issues, renovation costs, and potential value, he was able to justify his lower offer and gain the seller's acceptance, highlighting the power of preparation and clear communication.

Summary & Key Takeaways

• Nathan Tabor shares his journey into real estate, starting with an accidental purchase of an 18-unit apartment complex. He emphasizes the importance of due diligence, such as verifying zoning, to avoid costly mistakes. Nathan's strategy involves flipping multifamily properties by buying, renovating, and selling them for profit.

• He advises new investors to niche down and create a detailed business plan to attract investors and deals. Nathan warns against trusting rent rolls and stresses the importance of verifying income and expenses independently. He highlights the significance of having a clear vision to gain confidence and attract support.

• Nathan shares a strategy to renegotiate deals by using escrow to address seller claims, ensuring accountability. He emphasizes that successful investors don't take 'no' for an answer and continually seek opportunities to make deals work. His insights are valuable for anyone looking to succeed in real estate investing.