All Forum Posts by: Chizitem Ibeneme

 1. How they issue you money varies, the devil is in the details (the subscription agreement and PPM) - NEVER believe what is on the website, always read the PPM and documents. If its your first time engage an attorney to review them as well.

Syndication or fund is just a pool of money with a group of documents that outline all the terms. 

have you syndicated a fund before? I know a fund who generated more than 80% IRR last year and they kept everything over 30% IRR. think about that, their yield is twice as good as what is given to investors. They made more than 3 million profit without one dollar of their own money. it's a land entitlement fund for horizontal entitlement of ground up construction for national homebuilders in texas

@Chizitem Ibeneme Call local property managers in the areas you're considering for the most accurate info on rental rates. Don't overcomplicate it. Everyone loves to say use this app or website, just call the experts directly. It'll be the most accurate talking to boots on the ground and not an algorithm. 

For cap ex, same thing. Talk to management and agent/investors in the market to help. It'll be property specific depending on the condition but I'd say anywhere around 5% is going to be a number to start with. 5% cap ex. 8-10% for management. 5% for vacancy. Adjust depending on state of home and local market conditions. 

Hope that helps. 

I have been researching myself rent comps using Rentcast, Rentometer and Zillow.  All 3 will give different amounts/ranges.  I have not done enough comparisons to know which is more accurate (need subscription for Rentometer and Rentcast to get full access which I do not have).  My opinion is that Zillow appears to be the most accurate but I don't know if it depends on the area meaning maybe in another area, Rentcast or Rentometer may be more accurate.  I would use all 3 plus look at properties currently available for rent that are similar to what you are trying to comp (3 bedrooms/2 baths; similar condition; size; etc).  Sometimes I see properties currently for rent lower than those 3 services.  You have to dig in why is rent lower.  Maybe it is not a good area for rentals (especially if the homes available are in very nice condition).  Always be conservative and try to aim for the lower rents to do your analysis.  If it cash flows with the lower rents (even if say its $100), then dig in further. If you do end buying, you can price your property at a higher rent than what you used to do your analysis.  You can get lucky and get more cash flow.  Worse case, you cashflow a little or breakeven.  Good luck!

Hello @Chizitem Ibeneme,

While the unemployment rate is an interesting statistic, population growth is far more important.

Prices and rents are driven by demand. When people move into a city, they increase demand for homes and rentals, causing prices and rents to rise. If population growth is static or decreasing, prices and rents tend to remain flat or fall.

Also, unemployment figures can be misleading. For example, consider a 10% unemployment rate. If your tenants have a gross annual income between $60,000 and $85,000, and the majority of the unemployed earn $30,000 to $40,000, this will have little impact on your rental properties. However, if most of the unemployed fall within the $60,000 to $85,000 range, you're likely to face problems.

Hi Chizitem,

Great questions! Here’s how you can approach both issues:

For rent comparables, since RentCast and Rentometer are giving you different results, the best way to narrow them down is by averaging the estimates and focusing on properties that closely match the one you’re analyzing in terms of size, number of units, and amenities. Additionally, checking local listings on Zillow or Craigslist can help fine-tune the rental rates in that specific area. You might also want to consult local property managers or rental market reports for a more accurate picture.

When it comes to estimating CapEx during preliminary analysis, without visiting the property, you can use a general rule based on the property's age and condition. For older properties, expect a higher CapEx due to potential issues with major systems like roofing or plumbing. Many investors estimate 10-20% of the property value for older units or around $250-$500 per unit annually, depending on its condition. You can also check online resources like BiggerPockets or Roofstock, which offer general CapEx guidelines based on property type and age.

These methods should help you perform a solid preliminary analysis. Let me know if you need any more guidance!

Best,

Drago

10 mile radius is way too broad for rent comps.  "Maybe" 10 blocks.  Streets and values can change from one street to the next here in Montgomery.  BP rent estimator has been rather accurate in my searches.  

For your major capex expenses, I assume AC, WH, roof, you would need to get in touch with a local contractor (or two).  We can usually give you a price range immediately based on recent jobs and market conditions.  Typical 3/2 here= AC $7,500, WH 1,500-2,000, roof 7,000 -10,000.  Get city inspectors involved in any of that and you can add 25% to the cost.