All Forum Posts by: Curtis Rouse Jr

@Nick B. This 10 cap is an assumption for this particular market as I invest in Macon, Ga where 9 or 10 caps or typical (little rougher areas like this one). Compared this market to mine and I talked to a local investor down that who confirmed my assumptions. What are you seeing on your end for Columbus?

The 246% is based on the forced appreciation ($1.5mm - $1.7mm) by completing a 27 unit rehab and increase to market rents ($25 more than current weighted average). This assumption is based on a 5 year balloon that will negatively cashflow $470k while you hold and hope you can get an investor to pay that forced appreciation you added to the property. 

This is what the property looks like when you take out the forced appreciation play. Now is it a good investment? Definitely not, and for me personally I want to get paid monthly while I wait which this property doesn't. Unless you have huge cash reserves, you have to be extremely careful with these type of investments.

Let me know what other questions you have!

@Keith Ransom Would love to help out and analyze any MFRs that you need help with.

Yeah most of these asking prices aren't justified by any earnings (NOI), which is the bread and butter of valuing any MFR. I like getting paid from Day 1 of purchasing and not waiting 2 or 3 years once I rehab or raise rents. My true belief is that these owners either don't know what they are doing or over leveraged and trying to get out of the deal by selling you on the value add play, while completely ignoring the cash flow. It's kind of funny to me but at the end of the day all you can do is start looking for that next deal :)!

Message me so we can walk through this deal and I'll run it through my financial model and tell you what it "should be" worth and how much you should pay. My number/email is also below, so feel free to contact there as well.

@Ryan Hopkins & @Christopher Giannino  

I manually uploaded these so should show now....

@Brad Sumrok Thanks I'll be reaching out

@Ryan Hopkins Where are you finding deals and are they in NC or other markets. I'll message so we can talk in detail and the images should all be there, but I can always send you an email with details

If any else is having issues seeing images, let me know so I can re-upload

Hey Guys,

So I've built my own financial model and been running deal after deal through it and cannot anything worthwhile my time that meets my desired returns (10% COC with a value add play to possibly double my money in 3 - 5 years). Just wanted to share with everyone what the model looks like from a deal I analyzed today and the kind of deals I keep finding. Yes, I've been networking and talking to many brokers literally everyday, but I keep getting horrible deals in this "sellers" market.

So where are the deals? Willing to partner if the deal makes sense and I'm always looking to add to my investor list as they keep hounding me for deals so they can invest with me, but I can't show them properties like this below.

Oh and a little bit about me, I'm an apartment investor than currently owns and manages 36 units (2 apartment complexes and 1 house) looking to add another 30 - 50 units this year and have 1,000 units by 2026. Location doesn't matter as long as I have a good team in place, boots on the ground and I can yield returns to pay 6% - 8% preferred returns to my investors with a double in possibly 5 years. 

I also love helping other investors new or experienced analyze deals so send them my way :). Any questions please feel free to ask away!

@Benjamin Benomar Welcome to BP and yes, listening to all the podcasts are GOLD as I have went through them twice and currently on my third round and always learn something new. I'm a corporate finance professional and I invest on the apartment side where I currently own/manage 36 units down in Macon, Ga and looking to add another 40 - 50 unitds this year. Would love to help you analyze or answer any questions you may have so feel free to message me at any time. Best of luck!

Hey @Jonathan Valdes, in this scenario I would be actively looking regardless of having the money or not because nowadays finding money isn't the issue it's the deals. Once you locate the property that meets your criteria I would go ahead close on the deal. In the meantime of you looking for deals, you need to be stacking money as quickly as possible and another good thing you do with the FHA is utilize a 203k loan in which the rehab related expenses would be funded and this would be wrapped into your mortgage. I hope this helps and if you need help analyzing any deals, I've built a model that would help on the analysis side. Best of luck!

Hey @Dennis I agree with the other on this thread, building a list of investors begins with you and most importantly your track record. Then it comes down to the analysis of the property and being able to articulate every possible outcome from beginning and exiting of the deal. I invest in apartments and would love to help you analyze a deal through my financial I built that looks at key metrics that your investors will needing to know. Feel free to message me at anytime and best of luck getting this deal done! Remember, cashflow is king and ignore cap rates :)!!!

Financials with pictures on this craigslist ad:

https://macon.craigslist.org/reo/d/investor-special-completely/6498436759.html

Description:

OFF - MARKET brick exterior house that is completely renovated from the outside to the inside in 2017 with a long term tenant already in place until February 2019 (paying $680 monthly; can increase to $720 next year to market rents) currently yielding an ROI of 12.1% (if financed) or 7.8% (if all cash).

ROI w/ $720 market rent 14.3% (if financed) or 8.3% (if all cash)

Stock Market Yield: 7% (S&P 500 inflation adjusted - historical)
Bank Yield: 0.09% (current national average)


Updates:

New hardwood floors
All new appliances (stove, refrigerator, dishwasher, washing machine and dryer
New cabinets
New plumbing (throughout home)
New electrical (throughout home)
Fresh paint (interior/exterior)
Replaced all rotten wood (exterior)
New carpet in upstairs bonud room
Caps replaced on roof (very good condition)


ROI (if financed) Assumptions:

Amortized: 30 years
Interest Rate: 4.5%
Downpayment: 25%
Closing costs: 2%
Insurance: $420 annualized
Taxes: $500 annualized
Garbage: $480 annualized
Utilities: $0 paid by tenant
Material costs: 5% of annualized gross rents
Maintenance costs: 6% of annualized gross rents
Management costs: 8% of annualized gross rents
Capex: 2% of annualized gross rents


***We own a management company and will manage property free of charge for first 3 months. Perfect for your first investment, out of state/non local investor or anyone seeking passive monthly income from Day 1!!! We have taken the guessing work out of the equation and completed a full analysis on this investment taking a conservative approach to protect and grow your money.


Please let us know if you have any additional questions and have a blessed day!