All Forum Posts by: Evan Rice

yea, 3% cap rate is a really, really hard sell. Good luck!

@Yael Lederman - I like that reasoning. If/when rates drop competition and price increase.

@Jaron Walling Agree. This particular investor (early 40's) has been at it for a little over a decade so has seen the good the bad and the ugly. thx for the reply. Side note, I'm from Evansville, IN and all my best friends still live in the north Indy area (Zionsville, Carmel, Fishers). I'm trying to get them on the RE Investment train! What are you buying out there?

Most of the 'good' deals we are seeing are in KC metro. We look for positive cash flow and path of development (for appreciation) when investing.

Whats up investor friends? I had an interesting conversation with a longtime Denver investor who said 'I dont know why ANYONE would buy multi-family investment properties right now.' I know his reasons but am eager to hear more perspectives on both sides of the issue.

If you ARE buying now, why ?

If you ARE NOT buying now, why not?

@Tom Woolrich - good question. It's all a numbers game. If you plan to BRRRR the property then you need to consider several aspects..

- how are you financing the deal

- how much will it cost to rehab

- how much can you realistically rent it for

- how quickly can you refinance the property and what is the seasoning period (if any) to pull your equity out

- what is the ARV (after repair value) if you have to sell it ***always good to have multiple options***

@Kaleigh Sanchez - I've been fooled by those listings a few times. But congrats on getting started on the House Hack journey! Best way to start building wealth through real estate. That's how I got my start and have helped dozens of others do the same in Denver. Happy to be a resource if you need one.

Leo, great question. The two states (CO & AZ) are very similar from a cap rate and cash flow perspective. Phoenix compares to Denver and Tucson would be similar to Co Springs. We would consider 'good' deals to have cap rates in the low to mid 5's and great deals to be 6+ caps. From a cash flow perspective, when we underwrite our deals in these two states we use a 40% down payment (to ensure positive cash flow due to higher rates) but you might be able to get away with 25-30% down payment depending on the deal and the lender. One area to consider that is more balanced in regards to cash flow AND appreciation is Kansas CIty, MO and Kansas City, KS. Its a good hybrid market (cash flow + appreciation) and there are a few pockets we really like that are in the 'path of development.' Hopefully this is helpful!

@Snehann Kapnadak - great post! We do multi-family deals in KC, Colorado, Utah and Arizona  and the vast majority of our deals are getting done in the KC area vs the rest of our markets. Reason being the purchase prices are lower, higher cap rates, cash flow is better with a similar looking appreciation picture. Plus, we have rockstar PM's in the KC area who help us pick our spots. We are VERY optimistic about the short and long term multi-family market in KC.

My wife thinks I'm crazy for targeting homes close to our own because I risk offending people in our neighborhood. Is she on to something or is this standard practice?

- Evan