All Forum Posts by: Allan C.

Markets are efficient and all commodities reach equilibrium, especially with technology increasing market transparency. The party was over when everyone on BP started posting about killer profits a few years ago - it just took time for it to catch up. 

everone should understand the fundamentals of investing - returns are a function of risk, effort and barriers to entry. Some folks may luck out with high returns for a short period of time, but that is not sustainable without taking on risk, high effort or having some barrier to entry. 

lol.... at this rate I wouldn't be surprised if the OH mafia spammed equity investment forums telling folks to invest in cbus real estate whenever any asks if they should invest in index funds or individual stocks.  

Talk to lawyer to see if this clause helps you. Getting dropped by current insurance, and difficulty finding future insurers may qualify:

Under the Fair Housing Act, landlords are required to accommodate tenants with ESAs unless doing so would impose an undue financial burden, fundamentally alter the nature of the housing provider's services, or if the specific ESA poses a direct threat to the health and safety of others or would cause substantial physical damage to the property that cannot be reduced or eliminated by another reasonable accommodation

I was wondering what happened to Mr 10 NET CAPS. I had hoped his garbage posts would cease on this forum, but now I somewhat miss them.... more out of entertainment value. 

im aligned with your overall sentiment, but I believe investment returns are generally comparable between markets.  Sure you'll pay more taxes in IL than TN, but you'll also have higher rents. All markets are accessible, so if more investors chase TN because returns are higher, eventually acquisition prices increase. 

similar to the comment above, I think choosing asset class is the first step. For example if you want to invest in small MF, then stay away from Vegas cuz you're gonna be dealing with mostly bad areas. But there are a lot of small MF properties in other markets in great neighborhoods. 

there are good SFHs in all markets, so next decision will come down to age of properties, insurability, long term demand, etc...

Keep in mind that once you start putting assets under LLCs your loan and insurance coverage changes. Costs increase materially and your risk profile doesn't necessarily change unless you are operating under multi-member LLCs. 

I suggest putting some pen to paper to understand how much your costs change operating under LLC and see if the protection is worth it. Also do some research on how to maintain the LLC to preserve your veil. See if all the trade-offs make sense at that point.

19 buildings are a lot of different taxes, insurance and accounting to keep track of, on top of PMing. You don't need to make big decisions right away. How about finding a PM to start taking some of your units off your hands. You can test them out and increase what you offload after determining their reliability.

also consider selling your poorer performers to consolidate. All businesses do this at one point in their cycle, so this also applies to individual investors. Your unit count isn't necessarily the issue, but it's the number of buildings you have.  

figure out what you want to do with your time and outsource the rest. 

Does the current owner hold it free and clear?  Is the property older than 30 years?  Have you investigated insurance costs for this propert?  Commercial insurance is way harder to obtain these days, especially if the building is older than 30 years. I suggest you look at all operating costs before jumping into the deal since your perceived $200k discount can evaporate quickly to taxes, insurance and interest. 

also, when was this property last appraised?

32 units for less than $2M sounds like a property that will require heavy effort. Either a lot of maintenance of time managing challenged asset class tenants, or their issues during evictions & turnovers. Are you prepared for all of this?

analysis paralysis is real and an investment killer, but it has nothing to do with robust underwriting. If you have a detailed tool it actually helps you make better informed decisions quicker. 

it's bad advice telling someone to wing underwriting if they're considering a buy and hold for an 8-unit.