All Forum Posts by: Sanjoy V.

Is there anyway to reach out to you over phone, pm?

Thanks much for your detailed response Nick; 

Just worried that you buy at a 5-6 rate and then market goes to 7-8 cap or more in 5-10 years when you are ready to sell. Since it’s not a value add, the exit strayed isn’t clear

Hi there,

I am looking for advice on a current deal in Oak Lawn / Knox / Henderson area Dallas.

This is a small <45 probably class B, Boutique unit, which has been gutted and rebuilt, almost 90% leased in a very short time (although were given 1st month concession to fill the apartments). Almost everything is new, so probably not much upkeep.

Here are some of the questions I need help with:

1. Don't know what the property taxes are going to be? how do I calculate, should it be based on NOI and local cap rate? Will hiring a tax attorney help truly lower tax rate. Will the tax be based on purchase price?

2. Since it is recently leased there may not be much of T12 and expenses history, but since its a new and small property, is it reasonable to take 35% as expenses, instead of typical 50%?

3. What is the going cap in the area? and the rental increase that is expected? is it really going to continue to appreciate and have rental increase, with tons of apartments that are coming up? But most are going to be class A possibly and will be more expensive than a class B type apt and people could step down.

4. Trying to take mortgage amount without having the net worth equal to the loan amount. So I may get a 4.9% interest rate best with 25 year amortization, which will cut into the cash flow, but still may pay off more by 10 years and may even out?

Is warren MI, reasonable place to invest; how are the jobs, economy? What's the Cap rate here? Any locals/investors please comment ... Thanks

Hi there, Being out of state, it's hard to figure what the market in Michigan is; esp in Warren and surroundings; what is the economy like here north Warren? Is it wise to investing multifamily in this area, what's the CaP rate here typically? Would you expect any appreciation in the property at all? I know the GM tech center etc, but did it really produce enough jobs? Is this area huge risk for investment? Thanks

Any recommendations for real estate CPAs in Dallas Austin area or anywhere for that matter who specialize in this field 

thanks for your reply

Thanks David for your input!

Thanks Andrew and Jonathan, for further insight into this topic with well thought out responses. Most suggest to avoid properties more than 30 years old, given inherent issues with maintaining such properties; but those are the properties right now you may find a decent deal. Unless you are above cap 5%, you barely meet the Debt ratio and have any cash flow. The other option is to look at tertiary markets which are emerging, catch it in the growth cycle. Finding those will be important, if I am trying to keep close to home in Texas there  may not  be many...

With the current CAP rates, some places in Austin are at 4-5% at best, the question is how far can you compress the cap rate if you are buying at these low rates and sell 5 years later? are you really depending only on appreciation?

What will happen to these cap rates when interest rates go up? they may go up in order for people to buy them at high interest rates? which will make things for people buying at low cap rates? 

So, is it really a good time to invest in Multifamily, or should you wait out for the CAPs to improve? wanted thoughts on some of the BPs...