All Forum Posts by: Joshua Nicholas

Cap rate is a useless number. A 100 unit vacant brand new condo-quality building overlooking Central Park in Manhattan will have a cap rate of 0%. A fully occupied slum tenement in Detroit might be a 50% cap rate. 

Cap rates don't tell you anything because you'll likely operate the property differently than the current owners. I get sent at least 3 deals a day that claim to be 7 caps which are actually 5.5 caps because nobody in NYC has a building where it costs $300/door for repairs.

And if the market cap rate is 7%, but your seller will only make a deal if you can pay a 5 cap, that's not necessarily a terrible deal. Maybe you buy it at a 5 but can turn it into a 15, then it doesn't look so bad. I wouldn't use market cap rates as much more than a gauge if you're looking to just buy and hold, then you'd be wise to pay the market rate for those type properties.

You haven't supplied any information. 

In-Place NOI?

Purpose? (Coupon clip? Repositioning?)

Term? 

Why 80% LTV? (At a deal of this size and price point you're going to have alot of institutional guys willing to put out patient capital expecting stable but moderate returns. Also unlikely you'd get a Fannie Mae 80% LTV if the properties are decent as the debt yield wouldn't pass muster.)

$50k/door seems suspicious for the portfolio, why is it such a low price per unit?

Which Houston submarkets?

Again, you gotta supply alot more information before anyone can direct you to the right people. DM me if you actually want some referrals, I know some people at Meridian, Cooper Horowitz and Madison Realty who should be able to get you sorted if this a real opportunity.

 You're more or less "looking to make money" investing in apartments in the "USA". That's a ridiculously vague question.

Matt I spent several weeks in Miami, WPB and Ft. Lauderdale meeting with the top multifamily brokers in the tai-county area. If there were off market deals to be had they would have shown them to me because I have more than $10mm to allocate in south FL and NYC.

Not one could show me a deal that was above a 6 cap on real numbers in anywhere that wasn't a total war zone in WPB. If you have a deal at a REAL 8 cap (no broker pro-forma nonsense) I would love to look at it and pay you $50,000 if I take it down.

 As usual Joel Owens is in my brain. Craig Haskell is THE guy to learn syndication from.

Yields in the entire tri-state area are really low right now. If you want serious yields you need to invest somewhere else.

Can you explain your question more clearly and with fewer spelling errors?

And please include the following:

-How much do you have to invest

-Do you have additional equity partners

-How are your personal finances

Just to be honest, you're unlikely to be able to invest in the tri-state area, even in Suffolk County. I just sold a building in Westchester for $82,500 per unit and the building is a shell that needs electrical, plumbing, sprinklers, drywall and fire resistant stairs. 

The deal had multiple bidders and is in a marginal neighborhood. If you're inexperienced and don't have serious cash, the tri-state area is not the place you can get your feet wet.

You don't use business credit for the downpayment, you borrow the money from partners and in exchange give them a portion of the deal. Real estate investing 101.

Hard money lenders usually lend 65-75% of the project cost, charge 12-14% and 2 points for origination. 12% fees is a huge red flag, the only you'll get from "Midwest Corporate Credit" is an ulcer from the stress of losing $7,200.

Raising $60,000 isn't too difficult, if you talk with friends and family and maybe a real estate attorney or two you should be able to raise it.

Anthony I am buying this building in Poughkeepsie but that's not my favorite market, I just found an A+ deal in a gentrifying neighborhood.

I've been traveling to the southeast a lot this summer and I like Miami. 

Jacksonville has some stuff that seems compelling but I'm wary of the pricing there now.

 Couldn't agree more. I'm hoping to put a property under contract this week for my girlfriend's family. We are buying it unlevered and I should have it producing an 8% yield within 90 days. 

Those numbers are a fantasy in NYC.