All Forum Posts by: Chris Youssi

Welcome to the BP community Joe. This is a topic that appears quite often. I have owned both and prefer SFR far and away for the following reasons: higher appreciation - longer term tenants - quicker liquidation - more responsible tenant - easier to rent - higher cash flow / door. Some would differ in that vacancy becomes an issue . My current YTD vacancy is 1.17% 2017 was 1.40% 2016 2.3% - we currently have 30 doors within this asset class.

Congrats on your pending sales sounds like you have some exciting opportunities in your future. I would Google CCIM ( equivalent to a masters degree in real estate ) in the markets you are looking to invest. This a network of a few thousand highly skilled Brokers specializing in the commercial / investment world, the vast majority of whom own investment property.

Best wishes

Im all in with you on this one Chris. When I fill out my PFS I certainly don't place my home paid for free and clear as a liability that's absurd. One cannot place a price tag or monetary value on owning your personal residence free n clear as it's about peace of mind. HELOC is the way to go in case an opportunity presents itself all the while knowing you should be able to refi your new purchase relatively quickly. My thoughts

"You can never lose money by taking a profit"

 Gross not net

Contact the local Home Builders Association, join it and network at monthly meetings

Mike great thread well thought out and excellent feedback. Congrats looks like you have exciting opportunities ahead!

Ken I disagree as to the cap rates being the same as what your referring to above and in the commercial real estate world. For starters debt is never used in a calculation. The other variable is the caliber of the tenant and the length of the lease . Here is a real world example:

http://www.loopnet.com/for-sale/chicago-il/retail/...

and another

http://www.loopnet.com/for-sale/chicago-il/retail/...

Cap rates in the Commercial / retail/ industrial world are calculated as follows:

Net operating income ( again this will assume no debt ) divided by cap rate = value

Talk to any CCIM Broker and they will verify this formula.

 Jay Hinrichs can you pipe in here?

THX

Tom, I did not have info in front of me so double checked my loans . I stand corrected scenario 1 - interest rate is 4.75%  and scenario 2 is also 4.75% along with a 7 year term .

I think it depends on your overall goals/objectives. Personally I am at a minimum of 70% LTV and lowering very aggressively as all my SFR are on either 7 or 13/14 amortizations. I am a big believer in being patient on the buy - aggressive on the paydowns as my tenants pay me monthly cash flow in the present and monthly principal reductions for the future.