All Forum Posts by: Andrew Berg

Hi @Jon Holdman , thanks for the quick analysis. If you would be willing to explain, what rules/metrics did you use to be able to scrub those numbers? If I had a guess, you used the 50% rule to see that operating expenses are too low (50% of 292k should be $146k). But I'm not sure why you would expect NOI to be lower than stated. Unless maybe you're making a point about sellers generally upselling income and downselling expenses?

Hi all, I'm in the early stages of creating a REI investing plan, and to know whether a particular path forward is achievable I'd like to hear feedback whether this hypothetical scenario would get financing, either from a local/regional bank or commercial lender.

The Example Property

• 45 unit apartment complex in western-PA
• $2M purchase price
• $500k down (25% LTV)
• 45 units @ $44k/door
• NOI $170k per year (1.8 DCR)
• 30-year amortization @ 5% (just guessing. Not sure whether these terms are reasonable with the given 25% down)

The Buyer

• $750k net worth
• $100k/yr W-2 salary
• $200k cash reserves after downpayment
• No debt
• No real estate experience

The plan would be for the first 6-mo to 1-yr to hold down the W-2 job and use property management until things have stabilized and I'm comfortable with returns. Then quit the W-2 job and become a full-time property manager. So the question is... can I expect to finance something like this? The above scenario is based on this property, with the numbers rounded for simplicity.

Hi @J. Martin ,

Good to hear from you! And I'm bummed I'll be missing the summit this weekend -- I'm just too late to the party. :-)

Not being a speculator, I doubt I will be investing in the Bay Area. My long term (beginning in 2 years) plan will be to head back to the east coast and invest there, where cash returns could pay living expenses. It seems as though people invest as follows:

High-priced markets (SF, LA, Chicago, NYC): return through appreciation

Low-priced markets (everywhere else): return through cash flow.

Hello all,

Wow, what a community you all have built here! I became introduced by listening to the podcast, and then finally peeked in at the forums. I was totally blown away by the comraderie and friendliness of this board.

Anyway, I'm not currently invested in any properties but I'm looking for a more productive way to grow my money. All of the "Intro to Investing!" guides discuss a creating a mission statement and business plan, so I'll be working on that soon and will post it up to the New Investors board when it's ready.

The question I want to answer is: is it possible for me to, in two years, move away from the SF Bay Area and back to Pennsylvania (where I'm originally from) and stop working 9-5 to become a full-time rental landlord? This will be determined by the rate of return I can expect from various properties. I need to analyze a few sample properties and see what the spreadsheet reveals! Look forward to learning from all of you in the future.

-Andrew