All Forum Posts by: Karan Malhotra

 That makes perfect sense. I just wanted to confirm before taking the plunge. Interesting that I was talking to a couple of homeunion lenders today and they conveyed that interest only loans would not be available for investment properties. That's a little disheartening for me because I'd rather cash out of the property sooner than refinance every 5 years or so (if the value doesn't plunge). But I guess there are still good deals to be had with 7-8%+ cash on cash (after amortization of principal).

Great, thanks Jerry. I work at an alternative asset manager that participates in the CRE market in a variety of ways including development, value-add equity, transitional lending, CMBS bond trading etc. I work on the debt side (CRE transitional lending and CMBS bonds)

Just a follow up question I had:

But it is true in general though right, that bigger homes ($300k+) tend to have less yield than smaller homes. Of course there'd be exceptions, but just trying to figure if there's a general trend.

Thanks so much for your help again.

Hey guys, this site seems to be a great resource for newbies in SFRs such as myself to get started in residential real estate investing.

I have a background in commercial real estate debt and CMBS bond trading but new to investing for my own account in SFR. I have about $100k in equity and looking to invest in single family rentals. Had a few questions so thought would write this community and seek advice:

My criteria: Cash flow positive, at least 10% yield (NOI less interest / Equity), low/ no crime areas, geographically anywhere in the US works

a) Is it better to start out with 5 100k homes in class B, C neighborhoods or 2 $250k homes or 1 $500k home for a SFR. I've realized that cap rates tend to get lower as one goes up in size but I'm also a little skeptic about the tenant quality in $100k homes. I'll be hiring a property manager for any investment.

b) Any suggestions on markets with good cash yield? Ohio, Texas, Florida, Illinois are four markets I've narrowed down so far but definitely open to more.

c) What's the best way to source such investments? I found homeunion.com and have been chatting with those guys for the past few weeks. They seems good and make it easy for a passive investor such as myself. Any other suggestions welcome, including directly reaching out to brokers and then finding a property manager in that market.

d) How easy / common is it to get a 75-80% IO financing for SFR for a term as long as possible? I'm very yield focused and want to cash out of the property as soon as possible. Principal paydown reduces yield very significantly.

Thanks for your time in advance.