All Forum Posts by: Charles H.

I like Lindahl's stuff and his book (emerging markets) but it seems that he has ramped up his personal training to a new level which made me a little iffy... a 1$ program email offer recently made me lose my interest. It seems nowadays that RE mentors provide the best information when they start in this business and become very greedy at one point and separate the information into packages to make more money.

Originally posted by @Virginia Lara:

@Brian Nasso Great, I am interested in Savannah, Ga. because I have family nearby  and  also the homes are more affordable than my market. 

 One key thing is to check the crime map. We have a lot of crime here, so it is critical to find the blocks that are safe.

Originally posted by @Brian Schmelzlen:

Hi Charles,

I disagree with you about a 2% annual growth in revenue and a 2% annual growth in expenses would result in no change to the NOI.

Lets say annual revenue is $10,000, and annual expenses are $5,000 (for easier math). That means a $5,000 NOI initially. If revenue grows 2%, in year 2 it would be $10,200. If expenses grow 2%, in year 2 it would be $5,100. That means that NOI in year 2 would be $5,100 (still a growth of 2%).

That's right, complete brainf*rt in here. I was thinking with equal values V_V

What's your point of view with Capex reserves in the calculator, which seems to be part of the NOI?

Originally posted by @Account Closed:

Don’t kill the deal based solely off that. Locally, decommissioning is as easy as push it in/ fill it with dirt and plant grass on it. Or at least for sfh it is, almost bought one exactly like that.

 Following up on this one, decommissioning a pool will require "to jack hammer holes in the bottom of the pool plaster before they do dump dirt in. This makes any water from rainfall flow through the abandoned pool. If you don't do this and just fill it in with dirt, then any water from rainfall will become trapped by the pool's plaster."

Thank you all for your insights.

Originally posted by @Account Closed:

Don’t kill the deal based solely off that. Locally, decommissioning is as easy as push it in/ fill it with dirt and plant grass on it. Or at least for sfh it is, almost bought one exactly like that.

Never thought about that... I'd rather turn it into a nice patio area/study area (since it's in a college town). Based on T12, the pool maintenance drains 350$ a month + electricity so easily 400. And even though the broker is telling me that the pool is value add to have good tenants right now, I am not convinced at all, especially with all the late fees i see happening.

Hello all,

Couple questions when analyzing 5+ units deal...

- Capex: no matter how many deal analysis I perform with the BP rental calculator for 5-30 units, I usually end up far from the asking price. I noticed that the Capex reserve were included in the operating expenses while i read many times that it should not be included in the NOI, and therefore should not be counted toward the property price. Any insight on this?

- future assumptions: What do you guys believe is best for Annual income growth, PV growth and Expense growth ?

By plugging in a 2% for all them like explained in webinar for small multifamily building, it should not work since a 2% annual income and 2% annual expenses growths would make a 0% NOI differencial (therefore no added value).

Do you guys ultimately think the BP calculator is not the best in order to calculate a commercial multifamily deal?

Thanks for your insights,

Charles.

Hello,

I am looking at a deal that has a swimming pool. Regular size. Not crazy big. 26 units. US Southeast.

- What are your thoughts about having a swimming pool in small multifamily buildings?

- What are the cost to maintain? I remember that i was paying 120-150$ of electric bill just for the pool in my SFH + 100$ to have maintenance.

- Any law for safety ?

- What if somebody dies in there because he was drunk or something ? 

Thank you for sharing your thoughts!

I had huntsville in my sight. I visited a few multifamily properties overthere. There is one location, close to Redstone Arsenal that has tons of multifamily buildings next to each other. Driving in the neighborhood was a must to notice that. I end up not pursuing the deal because of the quantity of available units within 1 mile...

One thing I noticed...the rent is really really low and if i remember right, there was a tendency to include utilities in the rent, so I am not sure how it's cashflowing overthere. If there is any multifamily building investor here, I'd like to hear his experience!

I appreciate your feedbacks, guys. I agree that the current sellers are greedy for small stuff, which makes me wonder how deals on the marketplace are getting done...? By that, I mean that their OM usually show low expense rate (30-35% of GI) and I obviously come with an offer that is at least 20% lower than their asking price because I assume much higher expense rate and use actual rent/income. Lenders would not even agree to finance the deals with the numbers of OM. Who buy these “traps”/bad deals?...

Hello BP,

wanted to have your insight when you guys run your numbers and also how you adapt as interest rates are on the rise.

I tend to follow @Brandon Turner numbers (100$/month/door & 12%CoC for apartments). And a DCRS of at minimum 1.3 (bank loan requirement).

- Do you guys follow the same requirements?

- Do you lower your CoC and monthly CF as interest rates increase or do you look for a better deal?

Most of the local banks offers me a 20 years/6%ARM (not a fan of ARM...) so it makes it tight to reach my expectations. And in addition, sellers know there is demand for MF so they jack up their selling price and i usually end up with a, what it seems to be, a low ball offer all the time.

Thanks for sharing your thoughts. 

To our success.

CH