All Forum Posts by: Will G.

I am south fl transplant and currently in maryville, just outside knoxville, and would certainly be happy to share what i have learned about the area in the time i have spent here. Pm me or ask specifics here

Love the post, and replies saying to expect 9% appreciation, but.... real estate historically has appreciated 3% or on pace with inflation. Any deviation from that is external influence, money becomes less valuable(giving loans to anyone aka, last bubble), a large employer moves into the area and increases housing demand, large number of homes get destroyed in a natural disaster, etc. The stock market through time has returned 8%, and that is for companies, making things, offering services etc., so i doubt a pile of wood and brick can return more than that without a "revision to mean" or put another way, a correction back to historical appreciation.

So lookup ca home appreciation graphs for last 50 years or so that show the historical norms and the fluctuations to get an idea where prices should be.

With that said, "most of my investment life is spent waiting"-Warren buffet

And "markets can stay irrational longer than you can stay solvent"- john Keynes

if i read this right, you are asking if your current hazard policy should include the short term renters?

I always had to disclose that property was being rented to my ins co, as it is higher liability for them, and every company will treat that different. Short term (to ins co) means partying and drinking and much more liability, so yes please have good coverage and make sure they know how it is being used! You may want to consider an umbrella as well if you have significant assets to protect

As to the cause of the liquidity event, op lives in cali, so he probably sold an 1100 sf home:-)

I wish you luck on this..... in the same boat and have been having a terrible time getting it done! R.e. background and have been beating every bush in my area for a multi family deal. All possibilities in last 6 months have been overpriced, and i am old enough to have paid too much for an investment before(still regretting that), so really don't want to do that again.

REMBER WHERE WE ARE IN THE R.E. CYCLE!

I have to keep reminding myself of this when making offers on c properties advertised at 6% caps. We are in record low cap rates, so where do they go from here? Lower? What is your cap gonna be at resale in 10 years and how much cash flow will it eat if 2% higher at sale time? What will rising interest rates do to cap rates? I remember getting 5% on money sitting in the bank, could those condition return?

I have also been researching syndication, and it seems the syndicators are having difficulty finding good deals in cities worth investing in, then there are the issues with vetting syndicators, and they are also subject to the market conditions above.

I dont want to sound negative, but our world is yield starved right now, treasuries, bonds, bank cd's, etc don't return much. Hence all the pressure on multi family. But we will overbuild that class (multi fam)as we always do in the cycle. The only way i see to position againt this is lower priced properties with cheaper rents, as new developments will necessarily be top of market rents.

If you can find a deal with rent advantage in a decent area, great, if not, maybe diversify, into; syndication, some reits, online lending(prosper etc) and maybe an alternative asset class like industrial.

Also don't discount dry powder when the next big stock market correction shows up!

I have heard developing an rv park one should budget $30k per space, which seems high to me but, all the 50 amp underground power, waste plumbing, possible lift stations, pads for rv's concrete use areas, pavement, landscaping, engineering, surveys, sitework etc, maybe?

Self storage can be great, but super easy to replicate down the street, so tends to get overbuilt.

How about looking for an existing rv park? Easy to finance with existing cash flow.

take gross rents, subtract 50%, does the deal still look good? No? Move on. Yes, get it under contract and refine #'s in due diligence

I like John's response, that the sellers numbers are usually "end of the rainbow", best case senario, "possibilities"

Not reality.

Side note: made an offer on a 18 unit complex figuring 50% expenses. Got all records from management company and after careful audit, actual expenses: 52.4%!

the 2 year rule will NOT restart, as your address stays the same, if i understand your post right.

So your thinking of spending $600k, ( for 3000 sf), a year building out a new home, plus demo costs, hold costs, alternative living arangements etc, plus the risk of where the market will be 18 months from now?

What will that new house sell for?

I would be on the side of booking the gains, selling now ,but are you moving out of the area or do you have to buy something else in the area?

i might have screwed up, as i already let my banker know all the number are coming from the management co. I certainly can point out the capex items but wonder what the banks position will be as the net to owner is stated on their reports as $49k.

Also currently has 4 units vacant, which is another concern from the banks pov