All Forum Posts by: JT Spangler

I don't know that there's a right answer here, but personally I'm thinking that the real question is what is your current return on your cash, and is that return adequate? If not, I'd consider reallocating through either a cash out refi (SOMEONE will do it, even if it takes calling around), or selling and using the profits to buy two properties.

Ah, that makes sense. Thanks for the explanation. In this case, since I'm planning to refi in six months with the rehab adding to the value, it doesn't make financial sense. But that's definitely good info for the future!

@Albert Bui  Sorry, it wouldn't tag you in the post above, but here 'tis.

@Michael Marcoux  I did, if you read the posts carefully.

Albert: yeah, I've actually had to double clutch and go with a different lender last minute, and we are doing 5% down. No one has mentioned structuring to avoid PMI though -- can you expand on that?

@Jared DeValk  Thanks, man! Appreciate that.

Those seem like pretty awesome deals, compared to Nashville. That doesn't really tell you anything useful, though, because you want to compare them to the deals available in your area. Are these properties in Grand Rapids?

I'd just contact the owner and say you're an investor who lives around the corner, and were wondering what their plans for that property are. Just have a conversation, person to person, and see what the owner offers. It'll probably be clear from talking to them whether they're a tired landlord who might want to unload, or whether they plan on holding long term.

If they seem lost or confused about it, you can educate them on their options, from private sale, MLS sale, lease purchase, subject to, whatever. If they act like they're overwhelmed by the property demands or otherwise not interested in holding it long term, you can move on from there.

Another option, since you're going to self manage and are on tight margins, is to learn to do a lot of the simple repairs yourself. Most people with internet access, common sense, and some mechanical competency can tackle the minor repairs you might expect to run into. Builds a valuable skill for you, and keeps your maintenance costs down (on paper -- in real life you need to assign a value to your time).

Well, if it comes down to buying a bad deal or marketing to off list sellers to find a better deal/expanding your search to out of town areas, I think the latter two are worth considering. 

Personally, I'm with you in that a %100 financed deal doesn't need to cashflow quite as much right away. But I also have 0% experience with large multifams, so I don't personally think my opinion is worth a whole lot compared to experienced guys who've been there.

@Roy N.  Thanks for that -- I'm totally with you. :)

My question was mainly whether I've correctly understood that valuation on apartment complexes is done by GRM instead of comps, the way Fannie/Freddie properties are valued. I thought I remembered from a few of the BP podcasts that people had been able to force equity by a combination of improvements that enabled them to raise rents and better management that meant higher occupancy.

Now, provided the OP has a good grasp of his market, he's saying he can raise rents WITHOUT exceeding market rates, which I think we can all agree is a good idea.