All Forum Posts by: Franco Li

I hate when folks like that try to take advantage of innocent people. It is not professional at all for them not to list the details. You need to look at other bids for sure before making a decision. 

I think being in NYC, if you can buy the lot for cheap and have the connects to build a home, there is incredible value there. I would not seek a private lender first, but would talk to a bank and explain your strategy. I do recommend strongly to understand the laws and regulations for construction in NYC. They are extremely rigorous, and political, and maybe costly. Best of luck brother.

@Account Closed! 

Ideally, we would need certain data points from you guys, like a zip code and what type of terms your borrower is looking for, etc. Our analysts and myself, will then run a series of things on the investment (this is where the machine learning and crazy algorithms kicks in) and can give you a rough idea of whether the place actually makes money. We are pretty confident about this considering we have methods to scrape the internet and find live data points (instead of Zillow and Trulia, that requires people to input aged data). As a lender, you can hopefully then decide if the borrower is either too optimistic or right on target. Thanks again, look forward to reaching out soon.

@Kurt Kwart That's awesome! Being from NYC, we honestly don't hear too much about the revival down there. I recall a NYT article about potentially doing a college of sorts down there with all the casinos closing. Best of luck!

Hi Everyone!

My team and I are trying to test a product that will help bankers, lenders, and brokers on their underwriting and credit analysis of a borrower and their investment. It's a combination of machine learning, crazy algorithms, and big data, to create a one-of-a-kind appraisal and credit report. We are searching for interested parties to test the beta before we launch. Let me know if you are interested! This will be awesome!!

Thanks,

Franco

Your mortgage term is amazing, but it seems like you already had the property for a number of years, so I wonder what large repairs you would need to perform in the long-run. I think:

1. If you can't raise rents on the property, this place doesn't seem too profitable despite the amazing mortgage terms. I say this because you're only pocketing $300/month, and if you have to fix something huge, thats all your profit! Moreover, a month of vacancy will hit you like a knife in the chest w/ that steep mortgage. 

2. If you consider other opportunities, I think there are potentials for higher returns. I would not be too absorbed with the great lending terms, because an 5/7Y ARM can you get that rate if not lower. If you are not familiar, with an ARM, I wrote an article about it and give you more details on why its a good strategy.

3. Perhaps consider pulling out of the property, net around $90K, and see if you can buy THREE more properties that can net you that $3600/home/year. Then you'd be making triple the amount! 

4. Don't get attached. Haha.

Good luck brother.

Hi and welcome!

1.) I can't tell you exactly where the best locations are (given that there are hidden gems all over), but the worst locations are probably metropolitan areas. I know! Why would I say that, given metropolises like NYC and SF are hitting record market prices - historical highs - ? Well, the reason is because despite the residual value gain you might achieve on these properties, the rental cash flow is often not enough to cover your debt and expenses. So I would actually recommend not looking into LA, or NYC, or SF, and explore suburbs or smaller cities. At least, that's always been my strategy!

2.) I recently wrote an article about this on my site. The idea is to not get a 30-Year fixed mortgage. The reason is because your investment horizons is likely 5-7 years, and you can get cheaper financing with an ARM that will improve your cashflow and you won't have to worry about interest rate risk until later on when you decide to sell. Trust me, securing a fixed mortgage at 5.00%+ right now will do nothing for you as a buy and hold investor. I learned that the hard way...ironically I'm an investment banker. Also some local credit union allows you to do even 15%, what a dream!

3.) Probably consider the 1031 when you decide to exit the investment. Not sure how long you want to exit the current strategy.

4.) Hmm...do you think your market can sustain higher rents?

Keep your head up! I think you're on an excellent path. Good luck buddy!

FL

All,

My colleagues and I have created a free real estate analytics platform, in hopes of allowing amateur and professional investors, agents, and lenders to get an unbiased and independent feel for their opportunities. Crunching an investment property is now multi-dimensional, shareable, and tremendously easy. You can run stress scenarios and observe market data, and even get sensitivity analysis on rental rates.

Check us out! Its free to sign up, and free to use. Good luck all! 

www.divismart.com

Sincerely,

FL

Hi there! I don't know much about that market, but hasn't Atlantic City itself been a bit down over the years? I believe the casinos are not really attracting a lot of attention anymore, so that probably means less employment in that area versus the last 5-10 years. I guess you can rent it out anyway given the location. I would consult with a property manager in that area, or even check the local listings to test the temperature.

All,

My colleagues and I have created a free real estate analytics platform. Whether you are an investor or a professional, crunching an investment property is now multi-dimensional, shareable, and tremendously easy. You can run stress scenarios and observe market data, and even get sensitivity analysis on rental rates. 

Check us out! 

www.divismart.com

Sincerely,

FL