All Forum Posts by: Bruce Petersen

Well said @Jay Hinrichs,  seems at least once a month I have to remind someone of that very thing, rents DO go down.  

Don't be lulled into a false sense of safety and make bad or reckless decisions knowing that you will NEVER have to lower rents.  Need to stress test your underwriting, especially now with regard to many markets.

@Jeff Greenberg it really has more to do with the way I structure the back-end.  I don't dont typically do waterfalls or such which greatly benefits the passive investor.  

My target in my area is 7-9% COC and have never had a problem raising the capital needed with those types of returns. I am buying fully stabilized B to B+ assets where the only thing needed is implementing my operations processes and dialing things in to drive some value.

What makes that more acceptable is the fact that after property disposition they typically hit between 30-40% annualized returns.

I always make a fair offer with the info I have at the time.  I typically over capitalize a deal and only re-trade if the deal dies without it.

I NEVER EVER want to re-trade, I value my reputation greatly and want the transaction to be a positive one for the seller.  I don't want to be the guy that has the rep of getting under contract and then hammering them with a re-trade.  People learn and or hear of you and your tactics and it can follow you.  

Think about how you want to be dealt with as a seller when the time comes and conduct yourself accordingly.  You don't have to "win" the negotiation.  Let the seller think he has won, if you get his property from him you succeeded and won. 

PFS and Real Estate geared Bio. 

There is no real answer for me, all properties are different.  

In Austin my 120 unit is $5300 and around the corner my 192 is $5700. In San Antonio (1 1/2 hours away) our 256 is $5300 but our 292 unit 4 miles away is only $4800. 

Taxes are different in different cities, states and even neighborhoods. Same with utilities, each city we are in is wildly different. 

Insurance, are you in a flood plain, hurricane insurance?

Class of property matter for staffing, A+ will have a totally different need than a C. Could be as much as $500-600 difference right there alone. 

Best answer I can give is $4800-5500 and that's a really big spread. 

I don't use a "number". I dissect the financials and build a proforma take-over budget on every project I consider. 

Probably wanted a quick one line answer and not digging my response but to me it's more involved than that. 

I hope this helps with your community.

ROI is always an annual ratio.

I can get top load coin-op for about $1350 per set and Front load about $2300.  Card readers will run you another 150-300 each machine.

If you have someone you trust to collect I would buy your own if you have the capital raised to buy them. I usually hit between 50-100% ROI on my properties when I have to buy machines. The spread is based on whether you go top or front load, coin-op or card based.

On a 59 unit I would think you would be somewhere around $500-600/month in collections, if you annualize that it comes to $6000-7200 per year and if you apply an 8 CAP to that you have around 75-90k in value created. Now you do need to account for the current collections and back that out of the equation but this exercise should help I hope.

Welcome, Sir.

I only buy apartment complexes but if I can ever be of help let me know.

Generally you will be around 48-52% for properties without all bills paid and 60-65% for ABP.