All Forum Posts by: John Kesner

@Holli Haddix

This is a great question for your insurance guy. I know on a purchase sometimes insurance will ask that the heater be pressure tested to make sure there is not big risk of a CO2 problem. If your insurance company has no issue, I would think your good to have it hooked up.

Hello,

I'm putting together a direct mail marketing campaign to hit apartment owners that have very high equity. 

What message do you think would be most effective to get the conversation started?

Straight forward message along these lines - "Considering selling your multifamily property but worried about your tax liability and losing your cashflow?"

or

Not so forth coming on the owner finance angle - "Investor looking to purchase your multifamily property, no commissions, no hassles, no repairs, as-is condition" 

Anyone have any real world experience on these or any other approaches that work?

Thanks for your help!

@Greg Leach

Check out you local Association of Realtors website. My local one has lots of historical data to look at. Interestingly, they have a graph that shows my market is perfectly on track at 4.5% appreciation per year over the last 20+ years, 2003-2012 is just a big zig zag in the middle.

@Christopher Montoya

You might try a bigger multifamily property. If you get a building 5 units and up it will need a commercial loan. Those loans are primarily based on the performance (income) of the property. Be sure to run any properties you find thru a deal analyzer (like the ones here, on BP) so you can get an idea of how much income is left over after all expenses and the mortgage are paid. They do require bigger down payment tho.

@Greg Leach

If only I had a crystal ball!!

Lots of speculation out there as to what the market will do over the next few years. Here is my opinion. 

If something does cause a "major market correction" it will be for some different reason than what happened in 2008. The days of no doc loans, stated income loans, and the rest of the crazy stuff they did back then are gone! I think the market is on a much more stable foundation and if a correction happens it will be a correction, not a total collapse.

That said, the best thing you can do is to get to know the economic forces driving your area. Are there new companies opening up shop? If housing supply is low, what is the reason? At what rate is the population projected to grow, in your area? Are they building enough new homes to keep up with that growth? Get to know your local economy and you should have a good idea of what is going to happen in the next couple of years. 

As far as what you can do to protect your self is to stick with the fundamentals. Use a conservative approach to your analysis. I can tell you in my area, you can't just buy a property off the MLS, put a tenant in it and collect cash. You need to be creative and add value to a property to make it work. That can mean remodeling, fixing a floor plan, adding a bathroom, finishing a basement or attic, doing a pop top, converting garage space to living space, putting on an addition, doing a lot split, etc...

Goodluck!

@Joshua Ferrey

I have some interesting articles and a study I can send you, PM me.

@Curtis H.

Forgot to tag you, see above post.

Originally posted by @Chris Low:

if Tesla moves forward with their huge factory investment that is proposed to bring 5,000 jobs to the area. Housing is tight in Reno itself, but nearby cities have upside potential. Just a thought.

 This has happened, Tesla's new factory is operational but not up to full capacity. They say Tesla will eventually have almost 10K people employed. Tesla is not the only big deal Reno has happening, there are many companies moving to Reno. PM me if your interested, I can send you some more information.

Z Loraine Nielsen Its up to you if its ok. I personally wouldn't do it unless it would cashflow but everyone's tolerance is different. There are other factors to consider on an investment property. You must consider the future. Is it in a location that is desirable and will likely appreciate? Is there a strong rental market that could have the rent prices appreciate? What is your potential renter profile (good area, good house should = good long term tenants) How much money (downpayment) will you have to put in the deal (less money in = less risk and higher potential return)? Can you lock in a great owner occupied interest rate? Can you force appreciation through remodeling or adding sq ft? How will the mortgage interest deduction impact your cashflow? If you do move out you will be able to depreciate it on your taxes and that should be factored in The hardcore investors will say "if it doesn't cashflow on day one, don't do it". I will argue that you must look at all the possibilities for a return on your investment. Once you look at it from every angle it really comes down to your risk tolerance. The deal doesn't have to work as a rental either if you stay in the home for 2 years or longer, then sell, you get to keep the gains tax free (a strategy of its own). Good luck in your decision, and have fun crunching numbers!! -John

Originally posted by :

I probably won't get out of my FHA loan unless I someday do a cash out refinance to reinvest in another deal or unless interest rates go down quite a bit.

You might be waiting a very long time for interest rates to "go down quite a bit". Rates have been at historic lows for a long time and are only headed up.