All Forum Posts by: Barri Griffiths

@Mark Allen and @Mackal Smith thank you for taking the time to reply, I appreciate your insight.

I agree with both of you, I think underwriting the deal using IO only isn't the way to go, as should anything change in the market and I'm not able to get the rent bumps I thought I could, when the IO finishes id be in a lot of trouble.

Sorry for the delay in replying.

Barri 

Hi all,

When calculating future pro forma numbers on a potential deal, what should I use as a vacancy rate. Is it safe to use the current one, or is there an alternative way?

Maybe historical vacancy rates for the market?

Thanks

Barri

@Brian Burke thank you very much for your detailed and informative response. I have listened to many podcasts you've been on and read most if not all of your articles, so to have respond to my question was great.

I think it's going to take some time and trail and error to learn how to do this, but your help has definitely helped a lot.

Perhaps looking at recently sold properties and seeing what the tax assessment was for them following the purchase compared to previous years might also help?

Thanks again

Barri

Hello,

I'm currently actively searching for and underwriting deals.

I just went to see a 32 unit recently, and it's something that I might want to throw and LOI out on. But before I do I'm trying to dive a little deeper into the numbers. One line item is the taxes, and as I'll be paying higher taxes than previous years, what would be the best way to access what my taxes would be as this could make a substantial difference to the deal.

Thanks 

Barri 

Hello,

I'm currently actively searching for and underwriting deals.

I just went to see a 32 unit recently, and it's something that I might want to throw and LOI out on. But before I do I'm trying to dive a little deeper into the numbers. One line item is the taxes, and as I'll be paying higher taxes than previous years, what would be the best way to access what my taxes would be as this could make a substantial difference to the deal.

Thanks 

Barri 

Hey guys,

I was hoping to get some help when underwriting deals.

I've had some properties that have come across my desk, that have below market rents, and either with some better management, or light renovation there's some possibility of upward mobility in rents.

The problem is they're being sold at 6-6.5 cap. Which means after debt service there wouldn't be much cash flow, and COC is about 4%.

However with the Freddie Mac small balance program we could get up to 3 years of interest only payments.

What I'm trying to asses is what is is an acceptable yield to walk through the door at, and be happy with should things never change, and we aren't able to raise rents at all. 

Taking into account this worse case scenario, but at the same time understanding that there is a good probability of increasing the NOI through rent bumps, how do I decide what's acceptable and what's not?

I think when I break it down what I'm trying ti ask is, if I get IO for 3 years, can I then use that interest only to calculate what I can pay for the property along with what a pro forma NOI would look like with the rent increases?

Thanks

Barri

Last night we attended the sin city REIA in Las Vegas, hosted by Omar Merced.

It was packed with around 65 people, all hungry to learn and grow. This number is testament to Omar's hard work, great personality, and enthusiasm, which is infectious.

I recommend anyone who wants to do anything in Las Vegas in regards to investing to attend this meet up.

Last night Omar also gave away around a $1000 worth of gifts and prizes, which just goes to show his generosity!

If you read this.....thanks Omar from everyone at the REIA, we really appreciate you!!

Hi everyone,

I've just had an offer accepted for a short sale, which doesn't work as rental, but could work as a flip if the numbers are right on the comps.

How are comps usually run, do they go on the price per sqft on similar properties in the same neighborhood, or is it usually done on the sale price of very similar homes.

I thought it was th later, but when doing comps for this short sale my realtors were going off the price per sqft of homes in the same community.

For example they used properties that were around 1200 sqft, with a price per sqft of 105-107, with a sales price of around 125-135k.

But my property is over 1400 sqft, they're telling me That the market value is around 155k. Which is 20-30k more for just 200 sqft extra. This doesn't seem right to me.

Also just by using the price per sqft for the comps I feel like there's many other factors that could contribute to the market value.

If my realtors are wrong, what should I do? It would clearly show that they don't know what they're doing. But I still need to get comps somehow in order to make an informed decision. And need them to close the deal if I choose to close?

Thank you in advance for any help!

Hi everyone, I've tried to use the rental calculator to anylize a deal I was looking at, and I'm not sure if I've put in the right info. As it came back that I would make negative cash flow. This was after I modest with the sale price and rehab costs! I'm hoping this is incorrect, otherwise it seems like it'll be very tough to buy an sfr here in vegas and make it cash flow. I've tried to screen shot the results, Id be very grateful if someone took a quick and could help me out.

Thank you!

thank you mike!