All Forum Posts by: DongHui Patel

I dont know if thats quite true. For units of this size (8 units) avg expenses are in line with some other properties actuals. In fact theyre almost dead on with actuals from similar vintage buildings my friends own in the area. When we start to get to units of much larger size, the expenses % shoot up to 50% ish in my experience. Are you taking CAPEX reserves above the NOI line in your calculation? In which case, yes youre right.

However CAPEX is not supposed to be factored into NOI.

$2.415M Purchase Price

Down Payment: $750k (including closing costs)

70% LTV

Area: C  but gentrifying 

Condition: B- 

Potentially subject to LA COUNTY RENT CONTROL 3% cap. But historically raising 6-10% annually. 

Rental Revenue (At Market)= $195k Annual (excluding vacancies/bad debt/concessions)

              Vacancies: 5%

              Bad Debt assumption: 1%

             Concessions: 0.5%

I am assuming that expenses are running: 

12k for property management

30k for taxes

10k for maintenance and repairs

6k for insurance

7k for utilities (not reimbursed)

4k reserves

-------

69k total expenses

-------

Net operating income: 116k

After debt service and capex reserves, I am assuming net income would be around 5k annual for the first year. Going up thereafter.

I am concerned with 

1) Do these cash flows make sense at all? Considering it is in CA. CoC = 1-2% to start with with a conservative Pro-Forma.

2) The minute the rent control comes into place the deal starts to make no sense. 

3) There is a value add play to create 2 new studio's here- ADU's in garages. Additional $1600 per month rent per ADU. I dont know if the city will ever block these.

Looking for historical rents in Long beach CA from 2008 to now. Zumper et al only have it from 2014 to now.

I am trying to forecast the worst possible drop in rents from 2008 to 2010 and seeing if a pro-forma holds up. 

Anyone who has an idea how to achieve this please let me know.

Hi Can someone please explain the eviction moratorium in LA County

I am investigating many solo 401k providers or custodians but am very hesitant because I am Wondering what happens if the custodian runs off with my money?

What power does the custodian have here ?

What if they go out of biz ?

@Joshua Janus would like to hear more about multifamilies in OH. Can you ping me

No good deals here in CA! Where are all the old 8-12% CAP's for B properties?

Should have been clearer - specifically multifamily

Is there a resource somewhere documenting the going cap rates in different sub markets in the USA? 

@Sam Yin All the deals I proforma'd in the IE didnt yield 20% CoC, is there some extraordinary deals that you found with a huge upside that I am missing?