All Forum Posts by: David Alvarado

Welcome Kameahle!

@Brian Adams Congratulations on the recent acquisition! Your story is very inspirational.

Looks interesting, my only concern would be the validity of a 7% cap on refi. Almost $100k a unit sounds pricey if it's not class A/B that was constructed in the 90's or newer - albeit this is a smaller property. Care to share where the property is, if not not worries, but if it's tertiary then I'd be a bit more conservative there just to cover yourself. Also, I'd layout your timeline and pla of attack to get tenants to roll in order to have the opportunity to turn the units and bring in higher paying tenants. 

In terms of what I'd offer it all depends on the area and my outlook for the rental market. The cap rate is really centered around your ability to maintain that cash flow in perpetuity, higher rate bakes in the risk premium for the area, lower assumes lower anticipated risk. Something to consider. 

I agree the multifamily market is getting pricey unless you can find something that is value add, which is getting more and more rare as people are doing minor reno to push for top dollar. Most of the stuff I'm looking at is 15%-20% above what I believe is market pricing. Personally I think the off market deals by scoping out local owners and building relationships there is the way to go.

At this point uncertainty in overall macro economic conditions makes me a little hesitant unless I can find something in a relatively stable market that produces a double digit cap rate. 

Yes, I agree with Hubert in saying that you need to be sure that you are underwriting this more conservatively than what the broker is saying or even what the financials might say. Build a proforma with your DSCR numbers, which should at least be in the mid 1x's to be safe. Typically the bottom threshold for multifamily is 1.25x and that is for core class A product.

Also, when financing this it is important to have a strong relationship with your lender and be able to back up your experience as that will be an important part of them being comfortable with maintaining a property of that size. A good plan on the front end with a strong and supportive team will go a long way. Hope this helps and good luck!

That is a C/D area, not terrible but not the greatest. I lived in Miami for a few years and had a good friend that grew up there give me some good insight in terms of where it is safe, generally speaking. If you look at a map of Miami and zoom out far enough you'll notice there is an area boxed in by the highways - 95 and 826. This area is generally lower income, with parts just north also being the same. Also, generally speaking neighborhoods located east of 95 are a bit safer. Something to keep in mind when looking and considering the type of tenant you want to attract. Again, this is a very general statement and getting down there to drive the neighborhood is very important as one block will be very nice, followed by a second that is very run down. 

Welcome Sam! It is important to really identify your criteria and go from there to determine what type of risk tolerance you have and what areas will work for you. The deals are out there but there may be some molding that needs to be done to really find something that works for you. Luckily in DC we are close to many suburbs and a population that is stabilized by the federal government and a reatively diverse economy. As a result returns may be a bit lower versus outside markets but you are also provided with lower risk versus other tertiary markets that are more affected by potential macro economic influences. 

Hi Rashida and welcome to bigger pockets! I am a realtor local to you and am also looking at prospective properties in the Baltimore area for clients and myself. Feel free to reach out to me directly with any questions or if you want to bounce around ideas and need some assistance. Best of luck!

Hi Teah! Welcome! I too am in silver spring, md. A lot of good information on BP and a friendly community to gain great insight from. Good luck! Reach out if you have any questions or want to talk about local opportunities. 

Welcome Justin! Nice to see another investor in Maryland. I recently joined BP, but have already found the value in cruising the forums full of like-minded people. Best of luck!