All Forum Posts by: Eric Marofske

I don't have experience in the Detroit market, but I assume there are plenty of properties available that look great on paper but are going to be a real challenge to manage properly, especially from across the country. The safer bet would be to pick a more stable location in the Midwest, but everyone's goals, risk tolerance, etc is different.

Originally posted by @Mark Fedorov:

What your seller does not understand is that, if he does his taxes legally, he will still have the cap gain hit, but that seems to be his problem, not yours.

Yep, but at least it would be spread over the term of the carry.

It sounds like you aren't clear enough yourself on why you believe the benefits of a cpa or whatever other expenses you are referring to warrant the cost. Simply telling her to go read some books or listen to a podcast isn't a compelling argument. You were able to convince her at one point to spend (likely) $100k+ on a property after all...

Consistently consume as much REI information as possible over a few months and then see if it's something you still want to pursue.

Originally posted by @Kaila Turner:

Can anyone help me with other things I should have prepared for my first meeting with my realtor?

Be prepared to discuss how you will be purchasing the properties.  Someone that wants to acquire a significant number of units and has the means to do so will certainly get a broker's attention.  

Congrats on the purchase and good luck!  How'd you find the property?

Arpan Patel I agree flips are riskier, which is why we see higher interest rates on loans and higher returns demanded by investors in that space. I was only commenting on the fact that buying wrong on a long term hold and then hoping for appreciation/rent growth can be a dangerous game.

Arpan Patel what happens when you buy wrong on a long term hold but appreciation/rent growth is stagnant (or worse)? This could be even costlier than taking a loss on a flip, as your capital is locked up for years earning no return.

Every market is different; some are generally stable and have lower price to rent ratios (eg the midwest) and others are the opposite (California, New York). If your analysis of your market is indeed accurate, then perhaps the current invests are shooting primarily for appreciation, or maybe they are willing to accept lower returns than you. You might need to consider looking out of state to find a market more suitable to your investment criteria. Investors do this all the time!

There must be one/more issues with the property causing it to be trading at such a high NOI to price ratio (I'd recommend looking into how "cap rates" function if you plan to be operating in the commercial space). Not a problem if you have the necessary expertise to solve whatever problems the deal presents, but probably not ideal for a novice. Also, with only $20k available on a $150k purchase, you aren't going to have anythhing left over for rehab costs, reserves, etc. even if you can get in for 0 down