All Forum Posts by: Hunter Purnell

Quote from @Greg Scott:

I'm curious why you would want to do this.  This seems mostly an academic exercise as lease rate and Cap Rate are largely set by the market. You don't get to pick them.

The math should be fairly elementary. NOI / Cap Rate = Value. With NNN there is no reduction from operating expenses so monthly NNN x12 should equal NOI. At any fixed valuation Cap Rate and NNN must be perfectly proportional. If NNN goes up 10%, Cap Rate must go up 10%.

I had a major brain fart. It was slightly academic. I was solving for non-NNN. I'm not used to commercial. NNN Cap rate is very easy as you mentioned.

Solved. ChatGPT to the rescue. I was way overthinking it. PP * cap rate + Op. Exp.

I'm having trouble figuring out how to do this in excel. I want to see what the rental rate would be for a NNN lease based on the CAP rate. I have multiple % from 9% to 5% and want to see what rental rate would bring each CAP rate. For example 9% = (x - op. exp.) / PP x = rental rate. I'm not sure if I need goal seek or it can be done with an equation.

Congratulations. Great way to get started. Risky but if done correctly as it looks like you did its an "infinite ROI". I'm curious how many STR's do you think 1 employee can manage?

Quote from @Brandon Croucier:

If your certain you are doing this I would recommend just doing a cash out on your properties, around mid 7's.. having the funds available and put them into a savings account earning 4-5%.. Better than the alternative of having a line of credit at 12%, the 2-3% hit in spread is lower than a 5% increase in cost of capital in my opinion.

This is a solid point. I’m wanting to be a little conservative right now. My loans don’t adjust until 27 and on. I might just use my cash for now. If the deals become as profitable as I hope they will, this would be a good consideration. But ultimately this could fail and I could have to move back to KY. I hate to mess with my cash flow and 3.5% rate until I have more confidence. But I have considered doing this and most likely will when they adjust if not before no matter where I’m located. 

I’m moving down to the Palm Beach County area this Fall. I plan on getting my realtors license and flipping/ investing into properties. I was wondering if there was a way to tap the equity of my entire portfolio that is in KY. Preferably a local bank or credit union in the SE FL area that is friendly to real estate investors. They only allow basically 1 business day for payment at the PBC foreclosure auctions. So I would need quick access to funds. This could expand my purchasing power immensely. Any help or advice would be greatly appreciated. 

Anyone who lives or invests there can you provide your opinion on the market? Is it still red hot or has it slowed down? Inventory has jumped more so in the northern counties. Thanks in advance for any and all opinions.

Quote from @Corby Goade:

Not an accountant, but I'd imagine you could write off the decals, but not the car.

As an active investor, I'd probably not ever want to do a deal with a wholesaler driving a corvette around, talking about buying houses with "cash." 

I’m not a wholesaler. I also wouldn’t care what the wholesaler was driving as long as the numbers checked out. I’m a long term investor and flipper, but I also don’t think it would be great to show up to a person needing cash in a corvette.

Quote from @Michael Plaks:

 @Hunter Purnell

Advertising on your car does not convert your mileage into a deductible business mileage

Understood. I thought it could be a stretch. 

Example. Buy a Corvette and put lettering on the back windshield “Will buy your house as-is for cash! Call xxx-xxx-xxxx” or make a website for people to fill out a form. I actually think this would be pretty good advertising. Also use the vehicle to look for deals and travel to meetings etc. 

 Has anyone done this? Any red flags from your accountant? I would think this would be fine as long as it’s used for business. And if used for personal only write off % used for business which I have done for a truck in the past.