All Forum Posts by: John Swann

Hey Tim,

This is awesome, especially if you can add a room.

While your "fix" might be different if you sell vs. rent, at the end of the day I would consider what does the money you get allow you to do. 

If you're going to make $20k+ after getting all costs back when you sell, what does that new sum of money allow you to do?

Alternatively, if you can refinance and be at net-zero cash in the deal, what does the monthly cash flow allow you to achieve? If you have to leave some cash in the deal, same question to consider. In this scenario, you'd want to consider your cash-on-cash return and your total ROI (which will include depreciaton, cash flow, ammortization and appreciation).

I'd love to hear what you decide and how you decide to move in that direction.

Yep! Determining the cap rate for similar assets will give you an idea of what the property is worth at your pro forma NOI

Hey Catie, being between Raleigh and Fayetteville, I know there have to be other investors in Sanford.

Have you checked out the Pints and Properties meetup in Fayetteville? 

Ruben Garcia (https://www.facebook.com/prove...) is well connected in the area and could likely help you find Sanford investors. 

I'm sure there are other meetups as well.

Good luck!

Hey @Jennifer Dargento, congratulations on getting started! A huge first step that most never take.

I'd recommend trying PropWire first. It's free and operates much like PropStream. You can search by zip code and filter through different motivators (foreclosure, probate, absentee, etc.). 

If you're looking for properties in Chicago, you'll know what neighborhoods are B and C class.

@La'Terrius Campbell what is the value of the property after you do the $220k in renovations?

Cap Rate = NOI / Value of Property

If you're purchasing for $140k and doing $220k of renovations, you'll want the property to be worth $360k (140+220) at a minimum.

I'd ask other investors or CRE brokers in your area what a typical cap rate is for multifamily of that size.

If the typical cap rate in your area is 8%, at your pro forma NOI, the property is worth $568,125.

On the flip side, if you think the property is worth $450k after repairs, your cap rate is 10%.
@La'Terrius Campbell

Tommy,

Check out PropWire - https://propwire.com/search

It's a free data source and you can pull a list of vacant lots by zip code, county, city, etc. Export your list and skip trace in the platform or elsewhere. Have a VA call your list and try to find folks willing to sell.

I'm not doing this for land, but it's generally what I'm doing with other properties I'm interested in.

Hey Duane, great questions!

How are you tracking your rankings? Is there a specific tool you use?

I'd also be curious how your page compares to your competitors. Of course we need to differentiate ourselves from the competition, but if they are ranking for keywords you'd like, there is probably something to learn there.

Check this Facebook group out as well - https://www.facebook.com/group...

A lot of good knowledge in that group from @Keith M Sant and Andy Kolodgie.

I don't build (yet), but going to local real estate investing meetups have exposed me to a lot of builders.

I'd start by finding your local group/meetup and asking your question there. Facebook is a great tool for finding these groups and meetups as well.

Good luck!

I think you're on the right track for a pro forma cap rate (if that even makes sense).

Can you determine typical cap rates for similar assets in your market, use your pro forma NOI, and work backwards to determine the value of the property? That value would be with whatever work is needed to get to $750/unit. So, you would want to subtract repairs, holding costs, etc. from the value number you calculate to get in the ballpark of your offer.

Let me know what you do, I'm curious as well. Just sharing my two cents.

@Taylor Williams being picky with your first property isn't necessarily a bad thing. 

There are deals available at any time in a market cycle, you just need to know where to look. Someone above mentioned that just about every property an investor targets has a "distress".

I like to think of it as personal distress (divorce, inherited properties, etc.), financial distress (tax delinquent, foreclosure, etc.), and market distress (recession fears, house on market a long time, etc.). 

If you're looking for deals on the MLS in the Charlotte area, they are there, but they go quick for those who know (or think they know) what they're looking for. If you're looking off-market, make sure the properties you are targeting have some type of owner distress as mentioned above (personal / financial).