All Forum Posts by: Dustin Somers

Investment Info:

Condo buy & hold investment.

Purchase price: $140,000
Cash invested: $35,000

1/1 Condo near university UNR

What made you interested in investing in this type of deal?

Close to home easy management

How did you finance this deal?

Conventional

Lessons learned? Challenges?

Research the hell out of HOAs and potential special assessments

Investment Info:

Other commercial investment investment.

Purchase price: $1,100,000
Cash invested: $35,000

9 Unit Commercial strip mall Partner deal

What made you interested in investing in this type of deal?

Commercial properties offer greater ability for value control

How did you find this deal and how did you negotiate it?

List only with small town agent with terrible reputation Poorly marketed

How did you finance this deal?

Commercial loan with local bank

How did you add value to the deal?

Eliminated poor management company made improvements to property parking lot, signs and landscaping and restructuring leases from gross to modified gross

What was the outcome?

Estimated property value increased approximately $225,000 at current cap rates in local market

Lessons learned? Challenges?

Keep a very good real estate attorney in your pocket you never know when you may need them

Thanks for all the input. I was not trying to make any purchase decisions based off this rule, I know commercial is a whole different ball game. I have been targeting a DSCR of 1.3 or greater with decent COC.

I’ve recently started looking at commercial properties primarily retail store small shopping mall type and would like to know if the 1% rule applies in the same fashion as it does to multi family residential?

@Henley H. I use the Rentredi platform.

.

Pros,

1-It’s supper easy to set up

2-Has an app for both the landlord and tenant

3-Provides several options for the tenant to pay including cash

4- allows the tenant to make service request

5- you can set up automatic late fee charges

6- you can send notices

7-send payment received alerts when tenants pay

Cons

1- once the tenant pays. It takes about 3 -5 days for the money to be processed and deposited into your account

Not a big deal to me because i can see when they pay and know when to expect it

Hope this helps

@Michael E. I remember this episode it was a great approach to this exact issue. I personally have not done this because my properties are in CA and we have strict rent control laws. However i do offer my tenants 3 lease options when it’s time to renew a lease.

Option 1. Month to month at the max rent increase permitted

Option 2. A 6 month lease at a moderate increase

Option 3. A new 12 month lease at the lowest increase i am willing to take.

These are all wins for me and they give the tenant several option so they don’t feel like i am being unfair

@Nathan Yarnell. Find another agent. Cash flow in my opinion should be your top number one priority. If it doesn’t cash flow what good are your tax advantages? Ditch the agent

@Sam Collins

First of all ignore frank he clearly is on his high horse and only has knowledge of his market which is very different than yours and likely will never see the appreciation that your Texas market has and will likely continue to see. This is supposed to be a positive helpful platform

Now on to your property. It is very similar in size and style to my properties however your numbers don’t cash flow as well. This is likely caused in majority to the high tax rate present in Texas also and you may be over estimating a few of your expenses. (It’s not a bad thing to be conservative but you can conservative your way out of a decent property if your not careful). The cash flow you have come up with is low and would be an elimination for me unless there was some serious discounting and appreciation projected.

Would i buy it. ? Not likely, but its Possible if the price was right and there was serious appreciation on the horizon.

@Peter Eberhardt

Great work Peter. I live in Reno Nevada and invest in the same general area you finally landed. Buying a cash flowing property in this market is tough and persistence is key. The next one will come easier 

@Corvez L Kendrick. I think courses and mentor ship programs have their place and many people find them very useful. However i would encourage you to do the research your self and save that money for an actual investment. The teams and relationships can be formed just as easily with a little hard work and desire and Multifamily investing is not difficult. You can be very very successful without spending your money on a program