All Forum Posts by: Ben Fernandez

Hadn't thought about using it for deal analysis. I have a suite of tools though for that.

All others, we share the same usage. AI has definitely optimized everyone's productivity.

Regardless of where you get the furniture, you need to meet or exceed the competition's amenities. If that furniture grants you that performance potential go for it.

It appears you're looking more so for what your break even point is. Be careful where you pinch. As a savings of a few thousand dollars on furniture, could determine if your occupancy rate is 65% versus 70%...If the revenue is $50,000/yr that's $2,500 in one year (which could be the breakeven for that specific line-item expense).

To determine you total breakeven point occupancy rate, and not just related to the furniture, take your operating expenses plus your debt service and divide it by your effective gross income. This is the minimum occupancy you'll need to stay in the black. If you need tools to aid your evaluations, feel free to connect.

For any value add project, the primary evaluation is based on the numbers.

Provided you have trustworthy teammates for the renovation side and a competent agent on the valuation side, you'll perform no matter the location.

It seems your weighing factors that relate more towards long-term investing and where your asset will appreciate the most.

In respect to emerging markets, you'll want to use characteristics like population growth, employment growth, safety trends and path of progress. Here's a good article if you're looking for tips on this type of research. - https://investingte.com/how-to-identify-real-estate-micro-markets-to-invest-in/

Overall, depending on the deal and the asset class, you could perform well in either state. It is a case-by-case. Now if you don't want winter, you've already ruled out Ohio. Winter is definitely a thing in Ohio. 

An attorney can get you all squared away on the asset protection side of things. You just need an LLC of of a state that doesn't disclose, that owns the LLC that will own the property.

What I recommend, for any asset you buy in any location, especially fo an A Class asset that will likely have little to no cash flow, is that you evaluate your potential CapEx expenses effectively. Meaning you use the life-left of all the components that will need replacing in due time and factor that into your offer.

Components expiring within a short period of time needs to be accounted for as deferred maintenance. After all, your CapEx is apart of your operating expenses and is unique to each potential deal. If you need a tool for computations, feel free to connect with me.

My experience was fine for the tenants I've had. However, I know everyone's experience is different.

There are good people who utilize supportive programs. So my take is that you need to screen well regardless of the tenant type.

You may possibly need the occupancy rate if it isn't already factored into the revenue estimate.

If it's already factored in (assuming it likely is), next you'll need to factor the operating expenses so you can arrive at a net operating income. Essentially doing a cash flow analysis.

Once you have your NOI, you'll need to find the cap rate for that neighborhood. If you can't find a resource, you may need to work a few like-kind sales backwards using the gross income or NOI (if given).

At that point, you have what you need to determine the market value using the value formula of Value = NOI/Cap Rate.

Your need the income to meet the DSCR required by the lender. Get it occupied first with a lease. Also verify your season period requirements with the lender.

All you need is the cap rate for the area. Commercial based assets rely on NOI and cap rates to compute value. The same applies for STRs.

@Julio Gonzalez Thanks!

@Raghavendra Pillappa No problem