All Forum Posts by: Jim Pellerin

Hello!

I have been seeing job postings for Acquisitions Analyst and a recurring requirement is underwriting for acquisitions. I understand what an underwriter does in a traditional sense but what are these investment firms looking for when hiring an Analyst who could do underwriting?

Is Buildium worth the price?

I am primarily into fix and flips. Looking to get into wholesaling for internal lead generation. However, occasionally, I will be disposing off the properties to other buyers based on my work load. My primary focus will be on the acquisition side. For disposition, I may require a partner (another wholesaler perhaps) to help me out. If I choose a partner for disposition, how show the spread be split ? 

50-50?

60-40 ? 

Any other suggestions  ?

Hello Everyone!

So I'm reading through the ABCs of Real Eastate and am in chapter seven "Is It Really a Diamond?".  I wanted to ask a question on the numbers people use when evaluating vacancy to get projected income on an apartment.  Projected income is based on the actual rent being generated, rather than the advertised rent per unit (my take away is this is because rents change over time and current tenants may be grandfathered in at an old rate).  I see that Ken McElroy first calculated the projected income based on the historical rents, then uses this number and the excepted vacancy percentage to calculate the expected income lost to vacancy.  For reference, this is in the "income" chart on page 90

My question is, doesn't it make more sense to calculate vacancy off of the maximum potential income (assuming all units are rented at the current market rate) rather than the actual potential income?  Any vacant unit has the potential to be rented for the current market rate, not the average rate that the current tenants pay.  Aren't you actually missing out on that current market rate with vacancy?

To put some numbers on it, if 10 units have a current market rent for $500/month each, but the 10 units are rented at an average of $450/month right now, the way he calculates vacancy uses the $450 number.  With 10% vacancy (90% occupied), this means a total potential income of $4,050/month ($450*10*90%).  Calculating it the way I'm describing above would use the $500 number, giving a vacancy of $4,500 ($500*10*90%).  This gives a more conservative number, which is good I would think.  

So to sum up, why not use the actual generated rent for the gross potential income ($4500/month), but the market rate for vacancy ($500 at 10% vacancy) for a total of $4,000 in potential income?

Thank you for the help!  This is the first I'm learning about apartment investing rather than single family homes and it's quite different.

Looking at putting a 72 unit townhome development. Price hasn't been nailed down yet, but will likely be in the $20 million range. What would an acceptable CoC would look like for a property like this? I've calculated it anywhere from 6% to 11% based on management fees (or self-manage) and a small variation in rents (from $2000/month to $2250/month).

Thanks for your input.

I wanted to see what top 10 cities and towns would be good to acquire rental property in? Good as in terms of acquiring for a first time buyer/ beginner investor, and if the property the area is in can appreciate over time as well. 

Thanks!

I'm building my real estate investing team and recently enlisted the help of a real estate attorney to create a trust and start an llc. I was surprised when the quote to create the LLC was around $1050 (including filing fees). Is this typical or does that seem like a premium price to create the llc? I could just do it thru legal zoom for significantly less but i also respect the fact that this is not my area of expertise and would like to do it right the first time.

Just getting started into my career and wanted to know what are some things you value when trying to do ARV? More specific what to look for while doing a walkthroughs on property or through photos?