All Forum Posts by: Jeff Ostreim

@Olivia Drake

Expect to make around $200/door after all expenses including capex. Does an extra $600 (3 doors), $800 (4 doors) allow you to quit your day job?

Greg fantastic points.  This is what I need to wrap my head around.  I get a high cap property such as one of these and I need to be prepared to be in it for the long haul.  

Just sold my 9 unit recently that I had for all of 3 1/2 years.  Looking for my next investment.  Best of luck in your search!

 Both of these properties are a long ways from anything.  Definitely working class areas.  Next to nothing for entertainment.  I do feel that an 8 cap is too low for the 18 unit.  

To me it looks like an opportunity for  some decent force appreciation but these areas are not familiar to me and I believe the cap rates reflect the location of the towns.  I am curious what a market downturn does to multi family in areas like these

@Geordy Rostad - The 54 unit has had  property management the last 15 years and it is factored into the expenses.  This seller has 2 other buildings of similar size listed as well.  My question has more to do with a higher cap rate area and potential impacts of a downturn.  The rest will come out when I really come through the expenses.  

I am going to be looking at a couple of multi family properties a few hours from where I live. One is an 18 unit multi family with a mix of studios, one bedrooms and one 2 bedroom. Asking price is $650k and at about an 8 cap. It’s been on the market for 7 months. I’m thinking it should be a 9 cap and needs a new roof.

The second property is a 54 unit with some vacant retail space on the ground floor The 54 units are made up of studios and one bedrooms. Asking price is $1.8M and a 10 cap. It’s been listed for one month and the guy selling is a commercial broker and has owned the property for 15 years. Says he is selling because he is changing his focus to other properties.

What are your thoughts on areas with higher cap rates? Any particulars I should be thinking about when I go to these towns? 9 and 10 caps look great in a strong rental market like we are having now...

@Gino Barbaro thank you for the response.  Ok if they were to default on the note I get my property back plus the initial down payment and however many payments they made until they defaulted.  Doesn't sound so bad?

Also, help me follow the refi.  Right now after doing two rental increases I am really happy with the cash flow.  Once I refi my cash flow and equity in the property will be minimal.  Is that just considered a small price to pay for the $?

Have you looked at Skagit County? With $100k on a MFR you may be looking at attempting to see if you can find someone who would consider seller financing.

Is there any opportunity for value add?

@Julie Rossman  Do you know of anyone in our area?