Real Estate Investing: Sellers are still crazy! |
- Sellers are still crazy!
- Are you optimistic about the real estate market (rental and equity) in the next 2 years?
- Best advice I heard today
- So is everyone in agreement that WeWork is beyond fucked?
- Should I join as a minority partner.
- Let's say you wanted to take a look at the real estate market in another city. What metrics would you look for to get an overview?
- Tenant lease agreement question
- Converting Den to Bedroom?
- Current Cap rate for properties bought in 08 recession
- How to value 3rd floor of a construction? (i wouldn't own the land below)
- Refinance mortgage denied due to credit risk
- Investing question with unique circumstances
- Anybody ever had title problems after buying a foreclosure property?
- LLC Question
- Help transfer deed for land
- Should I flip houses right out of high school?
- Needing funding
- Should Landlords stage homes to show potential tenants and should Landlords provide furnished or unfurnished units?
- Is is normal to have multiple revisions of a Closing Disclosure?
- Figuring Out 1% Rule
- HELOC on a fixer upper?
| Posted: 24 Apr 2020 06:15 PM PDT My Onsite manager called me the other day telling me that a broker had contacted him and wanted to get owner contact, because they've got another MHP near ours that is for sale, and they are marketing for bids. I told him to give them my email, and send me an OM, because I'm in the market and I'd love to add more units to my belt this year. Talked to the broker. Here are the numbers: 430 Units. 30% Occupancy. Market Rent is $375 (according to the OM), actual is $350. Proforma expense ratio: 50%. Going to market at 4.5M. 430 * .3 = 129 * ( ( 350 * 12) * .5) = NOI of 270,900. 270,900 / 4,500,000 = 6.02 Cap Rate. Stabalized Cap Rates (90% occupancy of 200+ units) in the market is 4. The property is free and clear owned by the same guy for 40+ years. The Brokers argument when I said, no? "It's 10k per unit". I said so, that's not how this works, you know this, I know this, and the seller should know this. I'll buy it at the right cap rate (16.5) which is what I just bought my other property at with the same occupancy numbers: $1,650,000. I'm going to have to put another $2M into it to get to stabalized occupancy. I told him, "When the seller fails to get the offers he wants, and he is open to selling for what it's worth, call me. Or if he wants to get a higher price, then we can discuss some Seller Financing options. Or alternatively, if you find someone to buy his at that price, call me back, and I'll sell mine for the same valuation. What could this property be worth? (430[units] * 350 [market rent]) * 12[annualized] * .7[30% expense ratio] / .04 [Cap Rate]: $31,605,000 Sure, buying a property for 4.5M when it COULD BE worth 32M sounds like a everyones wet dream. But you are going to have put $2M and 5 years into it. And if you don't have a team, or experience or a 20-30M NW, to be able to carry the expenses on this property for 5 years it could ruin you. The carrying costs on 4M at 8% is $27,000/mo. This thing only has a 22,575/mo cash flow. So while you are throwing 2M at the rehab, you are still paying out 60k a month. And the absorbtion rate for that many units has too be there too. Lesson for newbies: Know your market, know what prevailing cap rates, standard occupancy and operating expenses are, and stick to your guns. Don't lose money on a wet dream. [link] [comments] |
| Are you optimistic about the real estate market (rental and equity) in the next 2 years? Posted: 24 Apr 2020 12:05 PM PDT |
| Posted: 24 Apr 2020 02:17 PM PDT The real money is made from the purchase of the investment not the sale. [link] [comments] |
| So is everyone in agreement that WeWork is beyond fucked? Posted: 24 Apr 2020 08:27 PM PDT From my perspective, it looks like almost 100% guarantee they will be fucked. Setting aside the profitability issues (i.e none), SoftBank pulling out as their main backer is the key. Without SoftBank's support, wework would collapse. And now because of COVID19, that's killing the entire office market. And they won't have the time to make those revenues back up just to service the debt on those long term leases. Am I right or am I missing something ? [link] [comments] |
| Should I join as a minority partner. Posted: 24 Apr 2020 01:25 PM PDT I have a friend who recently just refinanced 9 rental properties into a commercial loan. The gross monthly rent is $8,050. Market value of 9 properties approximately $755,000 and outstanding loan on the refi is 80% of that, or $604,000. Cash on hand in the business is approximately $80,000. No other debts. He would like me to join as a 33% owner of the company. We are discussing terms, currently, but curious what many of you would feel is reasonable. For simplicity, lets say I am bringing straight cash to the table for the ownership percentage. The goal would be to grow to about 75 total units, single family, multi-family, maybe a small apartment complex. Both of us have good-paying W-2 jobs. There will also be a clause that allows me to buy up to 50% equity in the company within 3 years at a pre-determined amount. Thanks for any input!! [link] [comments] |
| Posted: 25 Apr 2020 01:21 AM PDT I'm looking for a general idea of what metrics could describe a real estate market in a certain city. [link] [comments] |
| Tenant lease agreement question Posted: 24 Apr 2020 11:09 PM PDT Is it possible (legally and reasonably) to put into the lease agreement that annually or biannually you will go in to the unit/house, evaluate damages and repair them at the expense of the tenants deposit. Then if repairs are in fact needed, you then request them to effectively re-meet their deposit requirement? I've never heard of that and am new to it but it almost seems reasonable to an extent. Obviously don't have malicious intent to garnish their deposit BUT take care of the issues as they arise (issues being due to the tenant) at the deposits expense. I remember my college days and several of my friends and I lived in a large house over the course of 3 years. We number one didn't care about the deposit (young and dumb) and casual damages happened but we did try to repair them ourselves if possible. If the landlord (saw him when I signed the lease and when I moved out, he managed the property himself) had fixed things going forward with my idea, we prolly would have griped and moaned and putting more money but I don't think it would've deterred us from staying there at all. What's your guys' opinions/thoughts on this? [link] [comments] |
| Posted: 24 Apr 2020 07:05 PM PDT Potential investment multi family investment is listed as 3x 2BD/1BA units, but each have a den in the rear behind the kitchen with a closet. Perfect size for a bedroom. Trouble is that to access the rear egress has to go through the den/potential 3rd bedroom. It would mean traffic through someone's bedroom. I am not longer on side and can't take measurements of potential adding a demising wall and second door. It does effect my rental analysis so I need to know if I can rent it as a 3bd or only as a 2bd that's listed. It's in Chicago [link] [comments] |
| Current Cap rate for properties bought in 08 recession Posted: 24 Apr 2020 10:29 AM PDT I'am curious to what the cap rate of the rental properties purchased at the bottom of the 08 recession and are still being held today are. By my calculations if the bottom of the market was a 29% dip and a typical cap rate is 8% you would have a 27.6%(.08/.29) cap rate today relative to your recession purchase price. On a side note - Do you think an opportunity like this will come again? [link] [comments] |
| How to value 3rd floor of a construction? (i wouldn't own the land below) Posted: 24 Apr 2020 11:43 AM PDT Hello, So i've done some shared construction investments before (building rooms for hospitality) but besides this i do consider myself someone still at the beginning of the learning curve about real estate. Currently i found a property that already has two floors and has the foundations for building a 3rd floor. It's no more than 60 m2 (645 feet). I know the average price for a suqare meter in the area. But what im not sure is how to value buying this "roof". Any ideas on how to value this? [link] [comments] |
| Refinance mortgage denied due to credit risk Posted: 24 Apr 2020 10:03 PM PDT My friend recently purchased a property through the BRRR process and is at the refinance step. His bank appraisal has come back exactly where he wants it to be but the bank declined to give him a loan due to risk. He was told that his credit risk is 5, which is too high for them to approve right now. The loan was sought through a local credit union. Does anyone have any advice on how to improve the chances of his loan being approved at the next bank he approaches. This is his first property. He has a credit score of around 800 and no debt other than the hard money loan used to finance the property. There house is located in a good portion of a decent city and he has a 75% LTV on the proposed refinance. Currently there are no renters in the property, but people are viewing it now. I've suggested he wait until a renter has signed a lease and then reapproach for a mortgage, as the income will then be more assured. Any advice on how to proceed is appreciated. [link] [comments] |
| Investing question with unique circumstances Posted: 24 Apr 2020 10:01 PM PDT considering buying a pre-foreclosure. I wouldn't think of it now but I need a place to live and everything in the area requires a year lease. So rent for a year. Area has foreclosures for bad properties which is a red flag. price is so so but it will give me a place to live while i find or build something and prob will cash flow 1% of price. i am not in the area yet and cant find anything that would cash flow above 1% of purchases price looking on line...well, that doesn't get scooped up before me. My thinking is : I am mentally subtracting what i would have paid in rent for year from purchase price (except tax, maintenance, insurance, vacancy) and price is a bit better. additionally, I get to live there and see if I want to invest in buying a personal home there and some think the area could really change and get more sought after. Does this seem naive or dumb? It feels like a good idea but then I read other pro"s numbers and think I maybe making a beginners mistake. Any help appreciated!!! Thank you!! [link] [comments] |
| Anybody ever had title problems after buying a foreclosure property? Posted: 24 Apr 2020 05:19 PM PDT I see foreclosure properties come with title issues all the time and I'm wondering if anyone ever got burned after buying and how bad was it. [link] [comments] |
| Posted: 24 Apr 2020 05:59 AM PDT Hi all, Looking at buying my first rental soon and have a question regarding LLCs and tax benefits. Perhaps my thinking is wrong, but currently I'm under the impression you can collect rent through your LLC and then pay yourself through it to have less of a tax hit on rental income. Am I thinking correctly? If not, is something like this possible or even worthwhile? Thanks! [link] [comments] |
| Posted: 24 Apr 2020 12:19 PM PDT Idk if this is the right place but please feel free to remove or redirect me. But my grandfather owns a plot of land here in NJ and he recently passed away. His name was on the deed and I'm trying to get the deed in my name. Does anyone know how I can go about this process or provide a link? [link] [comments] |
| Should I flip houses right out of high school? Posted: 24 Apr 2020 12:51 PM PDT I am graduating high school next year, and I really want to get a head start on real estate. I am looking to flip houses, and I was wondering if it would be possible to start flipping straight out of high school? If I get my real estate license online or something like that, would it be possible? I want flipping houses to be my full time job, which I know is risky. Honestly, if this whole house flipping does not go well I could just be a real estate agent. Anyways, would it be a good idea for me to start right away? Will it be difficult for me? [link] [comments] |
| Posted: 24 Apr 2020 12:01 PM PDT I've been educating with a REÍ program for a year and started investing for 5 months, well trying to invest. I have this great deal with solid numbers and comps to flip. I've been contacting every lender in my area. But due to the market it's been hard to get a good answer. I have a 650 credit score, low income, and no money in the account to support my journey. I cannot get any sort of 2nd position funding. My family is poor and has bad credit, my fiancé's wife has no money willing to lend. Looking for equity partners have been a fluke. I have not received feedback from sending all documents to them: I'm starting to lose hope in the dream of financial freedom. I'm needing advice and help from my fellow investors. How do I get out of this hell hole? [link] [comments] |
| Posted: 24 Apr 2020 11:29 AM PDT Hello, I am a fairly new real estate investor looking to invest in single family homes. I have been searching online and have not really found a clear answer if landlords should already provide furnished units for tenants in single family homes or if tenants provide their own furniture. Also when showing the property to potential tenants do any landlords stage their properties with furniture or show the unit empty? Thanks! [link] [comments] |
| Is is normal to have multiple revisions of a Closing Disclosure? Posted: 24 Apr 2020 11:20 AM PDT Just as the title says, Is is normal to have multiple revisions of a Closing Disclosure? Background: I went under contract on April 3rd; about a week later my lender sent me the first closing disclosure and said "Don't worry about the cost-to-close and monthly payment numbers, just sign this one and get it back to me. We will send a revised Closing Disclosure in a couple weeks with lower numbers." Today I got the second revision of the Closing Disclosure with the cost-to-close and monthly payment numbers closer to what I expected, but still a little high. My lender said the same thing as with the first revision, and that a final revision will be sent to me a couple days before closing next week. Is this normal? It seems strange that a bank would have me sign a document saying my cost to close is $30,000 on the first Closing Disclosure revision, $22,000 on the second second revision, and I expect/hope the final revision is closer to $21,000. [link] [comments] |
| Posted: 24 Apr 2020 06:33 AM PDT I have preliminarily identified 5 emerging markets that I am interested in investing in. My next step is to determine whether there are opportunities to meet the 1% rule in these markets. What is best method to determine whether this metric is able to be met? I am an out of state investor and not familiar with each market and what rents are. On top of that rents vary greatly within each individual market. Any suggestions? [link] [comments] |
| Posted: 24 Apr 2020 04:11 AM PDT Planning on paying cash for a property that is in need of renovations, say $50k. The towns appraisal for tax purposes have the house at $150k. I'd like to buy the house and then take a HELOC on the property to do the renovations. Or Home Equity Loan. Any issues with this? Is there a better way to get a loan to do the renovations? I don't necessarily want to get a renovation loan to buy the property because that involves a general contractor and a lot of work to get the loan, and the delay, and cash is still king. Which is better HELOC or Home Equity Loan for this type of venture? Thanks for any insight! [link] [comments] |
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