All Forum Posts by: Justin Frank

@DJ Scruggs

I understand that this is a serious virus but from my understanding and from what I have learned being face to face with doctors who have researched and treated this virus is that it’s not to be much different than the flu. This is a new virus which makes it scary and it does have potential to mutate into something much worse. The unknown is scary. My gripe is with media. To make people aware is both smart and fair but to scare the **** out of people and shut down the world over this just seems out of line. This is my opinion and I have been wrong many times before.

Media has done a fantastic job marketing this illness and with everything that is going on with oil/gas it couldn’t have come at a better time. My wife is a PA and I work in the fire service. We have had many of briefings by doctors on this virus. COVID is no worse than the flu and actually less of the population is effected by this virus in comparison to the flu. Older folks are fairing the worst (which is typical) while children aren’t effected at all. I do not want COVID, I do not want the flu, I do not want TB, etc...... with that being said this is a media driven crisis. Is it serious, yes it is, but it is no worse than the typical flu. Could you imagine if the economy was influenced annually by the flu each year? What a weird world we would be living in. It is amazing to see all that is happening because of this. I do not know where this will go and/or end. I do feel it will get worse before it gets better and unfortunately this will effect (not the actual virus, only the fear of the virus) a lot of folks negatively. Media is the last entity we should listen to or trust, yet we all seem to believe whatever they say. Listen to the CDC and get online to search for Dr. Drew addressing the virus and the media. 

@Kris Bennett

Unfortunately, I don’t think there is much we can do besides continue to search for the deal that meets the  criteria we are looking for. You just have to sort through a lot more deals right now to find the right one. I keep being told to be patient which Is very hard to do when you are hungry for your next deal. 

There is a lot of money circulating right now and there are a lot of new buyers/people looking for self storage. With SS becoming more popular it just naturally becomes more competitive driving cap rates down and values up. There are a lot of folks that have hundreds of thousands, if not millions who will in my opinion overpay for a property in this market. Some folks can afford and are ok with buying facilities that only provide 4-6% returns. One of the most interesting thing i see is the folks that are paying for the potential of the property. Similar to what you had mentioned in your post. I don’t understand it but maybe the folks who are doing this are in a Much different spot than I. I am sure Most of these folks will fair well, however some may not and if they become distressed I hope to be there to buy 😏

@Samira King

I own a SFR property in Oregon. Love Oregon but not necessarily looking for anymore residential properties there. I wouldn't buy any residential properties to hold in Oregon but I would work on a project I could flip and put the proceeds elsewhere.

@Kris Bennett

My biggest struggle is that a lot of sellers with value add deals want you to pay for the value add potential upfront. If their property “could” produce $18k/mo of revenue, they want you to pay as though it already is. The worst part is; people are buying them up left and right. What the hell lol. 

@Dustin Rose

What do you need out of a partner? Do you have experience with fix and flips?

@Joshua Norwood

Speak with a bank about your home and take a peak at your options. A HELOC would Most likely be a better option for you. The only downside of a HELOC is that if the market is to take a poo the bank can put a stop on your credit line at any time. If you cash out refinance, the money is yours but you don't have the same flexibility of only paying interest on the money if and when you use it.

@Jakobe Smiff

Are you purchasing for $800k or just think it’s valued at that? I would be certain and identify whether it is a 4 unit or a 5. This could potentially give you very different values. If you are purchasing for $800k, rents are guesstimated to come it at $69,400 annually, and expenses are a whopping 65% of your income, I would say this is not a good deal. You would hardly have $2k/mo to cover your mortgage on the property. Also, take into consideration if you come in and try to bump up the rent several hundred dollars on existing tenants they may up and leave. This  will leave you with a high vacancy period until you fill the units. Can you cover the note on the building alone? Why are your expenses so high? Especially if you are self managing. Also, the structure was built in 1912. I would make sure you dig into that building; plumbing, electrical, paint, etc...... I’m sure it’s a cool old building but it could also come with a handful of problems due to its age and depending on how past owners have kept up with it. You may want to be more clear on your purchase point. If I were looking at it, I would purchase based on the current income and my projected expenses. I do my best not to purchase at the price of what the property COULD produce in regards to revenue. 

@Wendy Carpenter

Thought you should be in this post. If you aren’t already 😀

@Emilia Marchetti
Sorry for the delay in my response. I don’t think you are necessarily looking in the wrong spot. There are probably plenty of great deals to be had is your search area. The problem is that the Portland and Seattle areas are so popular and popularity brings a lot of competition which will then increase prices of real estate and make great deals hard to find. I think one the of best ways to attempt getting some, most or all of your money out of a purchase is by adding value to a property. If you can add value to a property well beyond your purchase point a bank will allow you to do a cash out refinance. With a cash out refinance you can get some, most, all, or even cash beyond your purchase price out of the property. Keep in mind that there is a lot that goes into this process and finding a value add property in this market and in a popular spot like the Alberta area you mentioned will be very difficult. So again, it all depends on what your goals are. If you can be patient and crafty you may be able to get your hands on an undervalued property that you can add value to and get your money out in a reasonable amount of time. Otherwise, you can dump your money into a stabilized property, get your 4-5% return, and hope the market will continue to appreciate. Deals are hard now but money is easy. Give it time; deals will be easy and money will be hard to come by. It’s a fun game lol 😀. I hope this helps a little. If you want more details or strategy on value add feel free to send me a message and we can talk.