All Forum Posts by: Jonathan Giglio

Hello, I am considering buying a property that has a 6% cap rate and only cash flows about $200/month. However, one of the units is currently renting for $875/month. Using rentometer.com, I've determined the average 1bd/1br rent in this area to be $1,400. 

Does anyone have any stories about what they did in this situation? There must be legal limits as to how much you can raise rent. $500 a month in crease is a lot for me as an investor, but is also a lot for the tenant and likely unreasonable. The tenant has been there 15 months and wishes to stay.

What would you do? Thanks.

Thank you everyone for the insight. I made an offer dependent on the tenants already being out and an inspection, which was very quickly denied. 

I learned through this short process and popped my cherry of making my first investment offer. On to the next!

I came across an opportunity to buy a single family that has renters in it that stopped paying rent. The seller, a friend, has already been working with an eviction attorney. The attorney believes the renters will be forced out in the next 3 months (I have seen the correspondence between current owner & attorney). The seller is highly motivated and just wants to be done. The property hasn't been maintained but according to the seller, there aren't any major repairs he is aware of. There are three comps in the neighborhood that justify my purchase price would be ~$100K under FMV. My market is INSANE currently, with properties receiving 20+ offers in the first 24 hours, waiving inspection, all cash, 5% over ask, etc...

My questions:

• - I'm exploring private lenders, but would a bank give me a loan on a property in this situation?
• - It seems very risky in COVID times to deal with evicting and there's a concern that could drag out...thoughts?
• - This would be my first investment, so I'm obviously hesitant/nervous. Having $100K in profit to play with eases that, but would you suggest    partnering up with someone who knows what they are doing?

I'd love any input. There's likely 100 bits of info you guys and gals will be looking for that I may or may not have. I've also considered just trying to wholesale it, as the current owner isn't connected in the REI community the way I am.

Thank you!
Jon

I'm putting the finishing touches on my excel spreadsheet and am hoping someone can help. I've searched a lot of places and can't find the answer to whether vacancy is considered an operating expense? Thank you!

THANK YOU everyone! What a freakin' community this is. Huge motivation in here. Book marking this thread for motivation down the road when I need it. 

Now, back to creating my Excel analytic sheet. You guys and gals are great. I appreciate everyone who took time to respond. Truly. Thank you.

From my understanding, NOI is calculated as follows: NOI = Total income - total operating expenses

I am finding some contradicting information regarding what should and should not be included in operating expenses. Most resources say do not include taxes, yet most resources say property taxes ARE operating expenses. 

What am I missing? Thanks in advance. 

January 1st I jumped in to the world of real estate investing. While I have made a ton of progress over the past three weeks (Thanks 12-Week Year), I am a bit concerned with some feedback I have been getting. I have spoken with five investors in my area (Southern NH, just north of Boston, MA) and every single one of them has said something to the effect of "Oh so exciting you are getting into investing. What a terrible time to start, however. You should wait a few years for the market to cool down."

Inventory is very low in my area and sales happen within days (sometimes hours), so there is definitely merit to what they are saying.

- Keep pushing. Analyze, make offers (if possible...inventory is VERY low), repeat.

- Continue networking with investors and try to find one that wants to help me out and sell me a property vs listing it

- Invest in other areas of the country. However, this seems so risky to me as I've never bought a rental property before. It's hard enough navigating this process in the area you live in, never mind a couple of thousand miles away.

I know this process won't be easy, and I am by no means giving up, just a bit discouraging to have 100% of investors tell you this is a horrible time to get into the game. 

End rant :)

Awesome. Thank you for the feedback Charles. 

I am in the process of building my excel calculator(s) for rental properties. I want to factor future assumptions for forecasting purposes, such as income and expense increases. Are there any standard rule of thumbs? 2% increase per year in rent? 5% increase in operating expenses? Does the whole thing just wash and it's best to not factor them in at all? Thank you!