All Forum Posts by: Alex Zan

My sister and I own a cashflowing building in So Cal, and it took about 27% down to do so. As Bruce said, every building should cash flow as long as your NOI covers your debt service. That means that in some areas like expensive CA, on average, you have to leave more equity in the property and thus the power of your leverage is worse.

Also, cashflow is not a static equation. Some units are below market, but they just need some fixing up to get higher rents and more cashflow. Some areas have pretty steady rental growth year over year, so that will change your cash flow year over year. You definitely make your money when you buy, but that doesn't mean that the building is locked the way it is once you own it. 

Another aside, it is true that a lot of areas are tough to cashflow in CA, but be careful with how you run your pro formas. I know on bigger pockets they like to use a 10% vacancy expectation, and that is a great rule of thumb across the board, however, in our market (Los Angeles) the average vacancy is more like 5%, so if we used 10% there would never be a purchase that made sense. 

Anne, at the risk of breaking protocol, in which case the mods will pull this down, I'll invite you to reach out to me. We'd be happy to share references. We work with accredited investors only.

Thanks and good luck!

Hey Ben, I'm a bit limited (50 connections at the time) to chat with you through bigger pockets)) But probably, this creative way will open the door to talk with you.  

Anne, I'm sure you will have more understanding of what Ben is doing after listening podcast with Ben (N 14).