All Forum Posts by: Onaje Barnes

Age of the property typically indicates what class it will fall in .. A-C ... which in the past would have been an indicator of the cap rate ...BUT the market is very HOT in MFH ( probably at a bubble level ) ... so everything is trading at low cap rates ( old and new buildings). 

@Emmett Meyer

FB investor forums

@Mark Gliebe

1. Cap rates are basically a measure of what the market value is for a property .. people use them to compare commercial properties mainly bc they are rarely similar . eX you can compare a 12 plex vs a 30 unit.

2. Specifically Cap rates are defined as the Net Operating income / price of the asset .

3. So it's really important to understand NOI ... NOI is gross rents minus total expenditures ( not including debt service ) ... NOI is the number that you want to care about MOST ... with MFH it's important to understand all of the costs .. like water bills , electric bills , maintenance, tax bills, trash service etc . Once the NOI is properly calculated and most importantly, Verifiable then you can think about Cap rates/ price.

4. Lastly you need to think about how the property will be purchased .. Ex. Cash, financed , how much down , what terms .. etc that will dictate what you can afford cap rate wise.

@Gerry Magrini

Personally I would let him do it under the stipulations that’ you outlined ... then pay close attention and learn the business model for yourself. I would share in the profits so that I can learn what kind of yield is possible. Then ultimately when the lease is up, you can decide to renew or do it yourself.

@Gerry Magrini

Personally I would let him do it under the stipulations that’ you outlined ... then pay close attention and learn the business model for yourself. I would share in the profits so that I can learn what kind of yield is possible. Then ultimately when the lease is up, you can decide to renew or do it yourself.

I'm in Texas and have been to an auction already and the deals look amazing! but how do i check for a clean title before I purchase? Most of the places online are asking for $25-50 per search and I estimate that i will need to do about 30 searches per month...which can get expensive. Is there a place to go for public records and what exactly am i looking for. I know I'm supposed to be looking for liens but what else? Any help would be greatly appreciated.

i have been doing my research for about 8-10 months and i finally found a good property in a pretty good niegborhood. I am so exited that i finally have started the process of being an investor. i bought the house for $130K it is 4-2.5 3000 sq feet. Avg homes in the area sell at $75 a sq foot so i figured i could get about $215K--$215K for it to get rid of it fast. Right now the budget is at $25K w about $5k in contengcy which after 2 weeks of work so far i think i will have to use due to unforseen costs...but i still think I'm in good shape. Any thoughts?

as a fellow newbie....I too am very scared
2 things to think about:

1. You shouldn't over-extending yourself....I think you should invest/ purchase any properties under the worst case senarios....are u able to hold onto a property while paying another rent/ mortage? If you can't afford to hold a 300K+ property and rent----then why invest in it? B/c you don't want to get in over your head. That equals foreclosure potential. Have a plan to hold the property and a exit strategy. That's my opinion.....and granted i'm just starting out.

2. Additionally I'm of the firm belief that u should invest in an area that u know....In my case i lived /grew up in Houston and LY i lived in Dallas for a year and just moved back to Houston....i decided to wait to buy my first property until i got back Houston a place that I know---nieghborhoods and property values.

i think it would be good to research the area...if like you said the area is rapidly developing.....then it may be a good buy...some things to think about....is it in the city or the suburbs....why is the new developement happening? Is the area appreciating....how does the county appraise it?