All Forum Posts by: Will G.

thank you for the input!

In this instance all the stated expenses are coming from the management company and in 2017 they (mgmt co) went in and and replaced flooring, paint etc on three of the units and charged the owner around 17 grand, some of which was normal re rent expenses, some, new vinyl flooring, so it all got grouped together as expenses from mgmt co on their reports.

Should i back out this $17k, i mean add it back to the $49k noi to get the offer price?

Mind you the other 15 units are in need of similiar redo

oh my goodness, people lying to make money!:-)

This is the new normal, and there is no end to the newbies who will pay too much for a property. We are having a bit of a multi bubble and the inexperienced who pay too much now are going to cause the distressed sales of tomorrow. Congrats on being thorough and avoiding extra risk. Please just figure on 50 percent expenses regardless of what the seller comes up with.

I read a great post, guy bought brand new house, rented it for 12 years to one single tenant, and at the end of term all the things needed fixed/ replaced totaled more than $20k! He did not make a dime on the rent but did benefit from the loan paydown only! His advice... always count on 50% for expenses.

Most sellers today are"fishin for idiots",  so dont be one.

Pocketeers, 

Looking at an 18 unit deal, 2016 had a noi of $72k and 2017 noi of $49k, due to lower gross rents and a bunch of needed cap ex on 3 of the units. How does one derive valuation with such different noi's?

What will the bank do to place a value, average those 2 years or?

seems all the banks are doing recourse on multifamily, until you get to$1m financed then you can go through freddi mac sbl program which is non recourse

I would want at least 8 cap on the apartments and at least a 10 on the storage units, so seperate out the noi's and math accordingly. Storage units have higher risk, as they are usually easy to replicate, and keep in mind with all the retail space going empty, how easy it will be to convert some of that to storage! see if she will hold some financing which can be win, win.

i am purchasing an apt complex, where the commission to the agent..$110k, plus that guy ownes over 200 doors, has built an incredible network of lenders, high net worth clients etc. How many houses would you have to sell for that ONE commission? But be ready for years of no comissions to get started

easy, easy answer....go commercial real estate agent! Use your degree to support yourself through the long difficult transition into that, and It is a long slow crawl but one day you will be thanking yourself for having the wisdom to post this

i think the op means when this record bull grenades! The stock market has never ended in the green 12 months in a row like 2017, he is expecting a pullback to allow value investing in r.e. again? Or 18 will see everyone pile in the stock market, typical of speculative bubbles, and leave us life long r.e. investors with less competition?

i know of a 20 unit property not on the mls, located in north nox, owner asking $1m, but otherwise HARD to find around here. I just got a lead on an 18 unit property, not on mls, but still only 7 cap for a c property!

Spencer, thank you for the guidance.

Ultimately trying to understand what to expect of cap rates as interest rates rise