All Forum Posts by: Hadar Orkibi

Thanks for sharing @David Hutson, yes i was referring to re-financing the deposit out of the deal. 

when you say "little under the appraised value" are you referring for few grands or do you aim for any percentage? 

How much per door do you aim to net cash-flow very month?

Cheers 

@David Hutson sounds like you done well in Memphis and happy to continue buying.

Do you mined sharing if you are buying from turn key and if you managing to buy under retails price and recycle your deposit out, that's assuming you don't buy cash.

If you don't buy from TK then how do you buy?

Thanks in advance, Cheers

Did you estimate the cost of repair on this @Haim Mamane Palman ?

Welcome, feel free to ask any question. There is no such thing as silly question and it's good way to educate yourself. 

@Simen Gundersen I have been considering investing in Memphis 3-4 years ago and decided not to, (im investing and flipping in New Zealand already) As at that time I couldn't get conventional loans, all i could get is expensive money from hard money lenders that was killing the deal. 

Been out of town makes it harder to fined great deals at bellow retail. and the deals make no sense at TK Retail prices in market with No rent or capital growth. 

My situation is different then yours as im a US citizen by birth and now working on qualifying for conventional loans. As long as it takes, when i do qualify i will start buying and regularly vising the market meeting and networking with people on the ground.

That Deal you posted Simen doesn't look like a deal, it is bellow the 1% rule (or 10% gross yield) and will get you nowhere.  I suggest you first get your ducks in a row and organize better finance. 

As @Curt Davis mentioned https://limaonecapital.com looks like a good options to start with.

Then go to the market and try to understand what a good deal is. you will need to look at over 12% gross yield and minimum 15% bellow retail value for it to be a reasonable deal. remember you need that discount OR equity upside as its non appreciating market and you want to recycle your money/deposit out. great deal will be higher yield and better discount.

Don't rush in to the mark, it will not appreciate anytime soon, in fact "its on fire" so better buying still to come!!

there are 2 types of obsntee landlord youn will find.

1. The one who is an investor/ owner who is not motivated to sell and would be harder to get a deal with. ie. " I will sell for the right price". ALLWAYS start a discussion and see where are their price expectations, usually they want a premium but you maybe surprised if you start asking questions. Like: who is managing the property, how are the tenants and how long they been there, did they had issues with the pm, tenants or any maintenance over the years. Etc etc..

2. The tired obsentee or these who were thinking about selling but didn't do anything about it are the one that you can possibly buy from. 

Ask them all the question and let them tell you all the reasons and possible motivation, why they may want to sell. Then work on finding a solution to the motivation. Be flexible on therms but less on the price. 

When an owner give me their asking price I ALLWAYS ask them how do they establish their asking price. 

 In Auckland in the last 3-4 years 5%-8% rent increase pa was the norm and expected by tenants. some areas had bidding wars like auctions on rentals. you will have 30-40 people coming to the showings. this City has around 40k-50k new migration incoming a year for the last few years.

I never lost a tenants do to rent increase, I use property mangers for all my buy and holds as i don't invest where i live. and i take their feedback regarding rent increases.
I only self manage one Commercial property which is the only investment we own in our town.

Thanks you for sharing the rehab info Alex now i have more of a picture of the level of work done.

The cost of rehab sounds lower in the US then in NZ. New Kitchen bathrooms, floor covering, paint throughout, light fittings etc - what we call cosmetic Rehab ("Reno" in Kiwi) would cost around 50k-60k for 3 bed house one bath and with new roof you can add another 15k. labor and material are expensive in NZ. Sound like in the states you get bigger bang for the buck.

We also own one house which is pre 1930s and never replaced the wiring or plumbing. But prior to purchase we had to have the wiring and walls checked for insurance assessment.

In NZ Some Insurance companies will not provide cover with old wiring and Scrim & Sarking walls as they are very flammable. 

Cheers H

Thanks for the comments @Alex Craig, i agree with your strategy of providing the tenants good customer service and attending there concerns and maintenance issues (within reason).

Im holding some tenants for 5-8 years with some of my buy and hod in Auckland NZ. and that's with increase of rent yearly by $10per week ( in NZ we charge rents 52 weeks of the year) so that's comes to increase of $520pa on rent. and this is in blue collar area. the last 2-3 years we had growth of 7%pa in rent. 

The point is that i wouldn't feel i could increase the rent by that much if i would have not been attending the tenants basic maintenance needs.

No doubt tenants who live in A Class area would be more affluent and could probably afford a small $15pa rent increase.

You would like to know that a friend of mine who is now based in LA purchased a property from you few years ago and he did mention that he is happy with it. 

What is the typical cost of rehab you are doing for the TK offering Alex? do you rewire and re-plumb the houses? the Mid South Home buyers advert saying that they completely renovate their houses i was wondering what Completely means...

 HI Bob, thanks for the post and link.

SF, LA, London, Hong Kong and Sydney in Australia are all appreciation markets.

Auckland N.Z which I invest in and flip also becoming an appreciation market only. house prices increased by over 75% from the peak of the last boom in 2007 and the median house price is near 1 million dollar. say +800k. 

The NZ Reserve Bank now introduce Loan to value restrictions to 60% for second property purchases I.e investment property. so now we need at-list 300k for deposit to buy any average house in AKL. although im still active in the AKL market i would like to diversify and make the money working harder for me producing better cash-flow. Cash-flow is king and only cash-flow can pay the bills and send me and my family on 6 weeks holiday every year. I don't believe in "living off equity" as equity can run out and its not reliable as steady cash flow.

It is known that some markets are appreciation markets and some are cash flow markets, Memphis looks like cash flow market but is lacking solid long term appreciation. 

The point im making is that each market can't have it all, unless one buy well and force equity out of the asset which is what the pros on the ground are doing in Memphis. its the same in any market.