No deal is free from unexpected problems, but these stumbling blocks can be made a lot less stressful if you have your capital budget done right. After joining us a few episodes ago to speak about her journey in real estate, Maureen Miles comes on again today to talk about how she works out whether her budgets can handle her cap-ex. Maureen started in real estate by renovating singles and duplexes before successfully making the transition to syndicating 100 plus unit complexes. She founded 4M Capital, a multifamily private equity investment firm and is the founder and general partner of a construction firm and a management firm too.
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In this episode, Maureen takes listeners step by step through her due diligence process from the time she first walks around a property with the broker until she has construction and renovations in full swing, warning what to look out for at each point. You’ll hear how Maureen refines her idea of her cap-ex rates, manages large scale renovations, raises for reserve budgets, vets contractors, assesses when to walk from a deal and a whole lot more today. Tune in for the full story.
Key Points From This Episode:
- How Maureen puts a rough cap-ex budget together in the early stages of viewing a property.
- Judging whether a deal will work out based on budget and how Maureen clarifies expenses.
- Maureen’s due diligence and how she gets quotes and vets a property more rigorously.
- When to drop a deal based on the unexpected discovery of pricey distresses.
- The value of having some reserve capital to weather problems and how to raise it.
- Why reserve budgets are useful for peace of mind even though they don’t get used much.
- Examples of when Maureen has had to use a reserve budget: roofing and piping surprises.
- Price differences in service and labor that can make renovations expensive.
- Hiring labor directly for saving costs and how managing many units enables this.
- Getting past pitfalls of overseeing construction via a management company.
- How to know which construction teams to use in a new area: get referrals.
- What Maureen learned after having to fire four general contractors on a build.
- An example where Maureen re-traded on a potential deal due to unexpected termites.
- Final comments about other things to watch out for while developing a capital budget.
[bctt tweet=”The last thing you want to do is spend 60 or a hundred thousand dollars on redoing something to find out that it wasn’t done properly, so it’s worth paying a construction manager to come down. — Maureen Miles” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Maureen Miles
Maureen Miles is well known for being a leading real estate expert, speaker, and entrepreneur. She is an expert in acquisitions, syndications, due diligence, capital renovations, efficient property operations, asset management, and raising private equity. She brings over 25 years of real estate experience to the firm she founded and is an acting managing partner of 4M Capital, a fast growing multifamily, private equity investment firm.
In the last 5.5 years Maureen has completed over 250M in transactions, raised over 75M in private equity and purchased over 3000 multifamily units. She currently controls, as an active General Partner, over 75M in assets. In the past 12 months, Maureen has sold 1100 units and purchased over 1300. Maureen is also the founder and a general partner of an Atlanta based property management company, and the founder and general partner of a southeast based construction company. Her diverse background and experience include everything from a licensed Realtor to a licensed General Contractor. She also has extensive experience in renovation/capital improvements, insurance, financing, and tax and title work.
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