All Forum Posts by: Jeff Kennedy

Hi  @Adam L. . I'm from Yuba City. I would call these guys... Meagher and Thomlinson 

https://wmmt.com/

They are the big commercial  broker in town. Maybe they can do it for you or at least refer you to someone.

Where is your property? What kind of tenant? Are you happy with the performance? I'm always interested in how other real estate guys are making money in this area.

@Adam L.

Thanks for the reply, Evan. Sounds like you have a great job for learning the real estate business and networking. I think your education could also provide a competitive advantage. Your off to a great start.

Yes. I love the BRRR method. It has helped me tremendously. I started in 2012. My timing was lucky. The market prices were low and have gone up a lot in the last eight years. I bought a duplex with local bank financing (zoning issues blocked us form Fannie/Freddie on that one). The next place was a fourplex (cheap off the MLS). I borrowed against my car and 401k to come up with the down payment and used a traditional mortgage with 20% down.. We were able to refinance those a year or so later and pulled some cash out for our next deals. Then I started buying off-market distressed homes and MF properties from wholesalers, MLS, auctions, etc. Buying low with cash and then refinancing with 30-year, low interest mortgages was definitely the key to scaling for me. All of my units cash-flow which also helps with scaling!

One last thing... I'm a huge fan of fourplexes. As you might know, four units is the maximum number of units on one parcel to still qualify for a traditional residential mortgage. Fannie and Freddie have limits on the number of loans a person can have. The highest max I've seen is ten. If you buy houses, this will give you 10 units with one loan each. But with fourplexes, you can have 40 units with those 10 loans. If you are married and you keep the loans/properties separate from your spouse, you can each have 10 loans... 80 units combined (if you buy all fourplexes) with low interest 30-year mortgages!

What is your degree in? What is your full-time occupation? If real estate sales is your full time gig, have you considered making it your part time gig so that real estate investing/sales/wholesaling/landlording can be your side hustle? 

It's just a thought because that's  how I work it. I am a full time flight paramedic. I own a consulting business on the side and also buy/manage rental units on the side. One reason I chose flight medicine is because it has lots of down time and I only have to "work" two days a week (24 hour shifts).

I'm up to 30 rental units now. I'm hoping to quit my "real job" in the next five to ten years. 

Just my two cents....

Hi Phillip, 

This is a question that may real estate beginners ask. Obviously there is no right or wrong answer. Only you can decide what is best for you depending on you goals, lifestyle, risk tolerance, timeline, profession, capital situation, credit history, skills, education, personality, etc. etc..... so many variables.

I started by buying a cheap duplex and doing some light fixing/improving. I rented it out and realized immediate cash flow and equity. I was fortunate to start in 2012 when prices were low and the economy was on the way up. I have 30 units now. Things are different in these times. I feel like there is less room for error in this market. If you can afford it, I would buy a value-add duplex or fourplex. But that's just my style/preference....

Good luck!

If you have a few rentals, then a portable room air conditioner is a good investment for these situations. For a few hundred dollars, you can buy a unit that sits on the floor and exhausts warm air out the window. It will significantly cool one of the rooms in the house. I have thirty rental units. Anytime someone has an air conditioning issue that is going to take a while, I let them use this portable unit. I've used it about six times in the past three years and the tenants are always highly appreciative. You are definitely not obligated to do this but we live in the Sacramento Valley and it gets 100 degrees plus here. Getting by with no A/C for a few days is doable but miserable. 

Hi @Lee Yoder

Thanks for sharing your story. I'm in contract for a similarr property here in California. Can you tell me what the total gross rents are now? Also, what are your expenses? Vacancy, repairs, capex, ins, taxes, utilities, management. I would really like to understand your capex and NOI. Thank you again for helping us learn through your deal.

Jeff

Thank you @John Warren and @Mary M.

I'm planning on talking to a few of the top commercial brokers in the area. I'm hoping someone will be able to provide an accurate number. It seems like knowing the going CAP rate would be crucial information for reasonable offer. This is a value add opportunity so I'm hoping to buy it relatively cheap then force appreciation with improvements and increased rents over the next five years.

I have purchased several homes with cash and then refinanced. I would try a traditional mortgage company/broker. How long ago did you buy this home? Be sure to look into the "delayed financing exception" if purchased the home in the last 12 months. This will give you the opportunity to finance up to 100% of the purchase price if the appraised value is high enough (75% LTV) after your repairs.

Thanks @Steve Morris

I have read and been told that an appraiser is going to focus on the NOI and CAP rate. I have been given three years worth of income/expense records. I feel like a have a good idea of the accurate NOI. I was hoping to use the NOI and the CAP rate to predict the appraisal value. You mentioned price per square foot. Are appraisers moving to that method as part of their calculations?

I'm looking to buy my first apartment building. I've never paid much attention to cap rates in the past since they aren't used much for SFRs, duplexes, etc. Can anyone tell me the best way to determine the going cap rate in a certain area? It's an off-market 14-unit C class property in Yuba County, CA.

Is there a good website for this?

Thank you for any