All Forum Posts by: Craig Grella

I think what jon and Mike mention regarding your time and expected profit is very smart. You MUST build that into your analysis.

If you just run the stock numbers bare bones to see what the ratios and returns are I think you sell yourself short.

If you expect a certain return on your time and money work that into the analysis upfront. If you determine your offer price needs to be (and i'm just making up this number) $50,000, but that's more than what the property is worth, then you have a choice to make - do you lower your expectation of profit or move on to another deal.

That's only a question you can answer. Play with a few deals in your area, make a few offers, and go to see a few properties. It's pretty standard to include a walk clause in these MF deals, so if you see something you don't like you can cancel the offer without any trouble.

I'd be careful about taking ownership to a property that someone else will be doing work on while you still own it. If they do something illegal or something that gets another person hurt, the liability might be on you. If they can't finish the repairs then you're stuck with a property that is unrentable or unsellable, and you have to spend more money to fix it.

If you can assign it and take a fee and get out altogether, great. But if this person needs you to buy it because they don't have a down payment or credit or any money at all - that might not be the best situation to get into if you're just starting out.

you got it keith. check around the internet and on his site realdata - you may be able to find it cheaper. It might even be at your local library.

I think he bundles his books with software too, like templates for analyzing property. But even if you can't find those, just reading that book you'll be able to develop a pretty good template for yourself to us.

I made my first MF template using suggestions in his books, ran quick numbers based off of how much money I knew I had to invest (which wasn't much), and sent my sheets to my agent who made offers on properties that fit my parameters. It was a great way to be proactive and get into properties where the sellers required an offer to take a peek and then get the real docs.

Cheryl,

I think it might be worth learning to do a full multi-unit analysis.

People who use those shortcuts already know how to analyze a property from top to bottom, and use those shortcuts as a quick tool to decide whether they should continue to analyze or just move onto another deal.

It's not that hard to mathematize (i made that word up) a few units, or any small multi-unit building, and there are even spreadsheets with cells built in to help you add your required profit, to pad or trend expenses, and to stress numbers up or down in future years.

Again, in my own opinion, if you're going to spend money on a few units you might as well know how to analyze those units and make an informed decision. Otherwise trying to figure out a shortcut is going to take just as much mind power as figuring out how to do the real analysis.

The easiest explanation of a multi-unit analysis for beginners is found in a book called What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, written by Ralph Gallinelli. I don't know him and have never spoken to him, but I find his book really breaks down the steps in unit analysis very well.
http://www.amazon.com/exec/obidos/ASIN/0071603271/realdata-20/ref=nosim

Most county websites have a ton of information. For example:

Los Angeles County Parcel Viewer:
http://assessormap.co.la.ca.us/mapping/viewer.asp

and King County, WA
http://www.kingcounty.gov/operations/gis/propresearch/parcelviewer.aspx

Not only can you link over to property data like taxes, and previous sales, you can also see things like permit status, code violations, lien filings, etc.

I would start with the county website where the property is located. Most of that info is public and free.

Do yourself a favor and find a local RE attorney to do that paperwork for you. It should only cost a few hundred bucks but will save you heartache if something goes wrong.

I love reading posts and replies like these because they show newbies how to look at a deal critically. Too many times they try to massage the numbers until they work.

In just a few short replies, y'all covered topics from cost per unit, bank loan numbers, private loan numbers, a down and dirty NOI/CAP analysis, the realities of rehabbing a multi-unit property, and even got a few snarky comments and veiled insult in there.

Nice work.

thanks Josh, I'll remember the link for the future, though I doubt I'll need it. The site runs pretty well. :)

Thanks for the ticket too.

Wasn't sure where to put this post, but it related to the youtube link in the profile contact section.

I've got my username there, but it looks like the link auto adds an "@" symbol before "User" and makes the link incorrect.

Any ideas on how to fix that?

I've always been a fan of the HJ Heinz quote:

"Quality is to a product as character is to a man."