All Forum Posts by: Kelly Smith

There are so many great networking events all over DFW area - can't possibly visit them all!  

Monday night is a good one about funding that I am attending.  I also host three free networking events a month that are easy, no sales mingling with other investors as well as an education component.  Message me and I"m happy to send details.    

Can you message met the meetup page?  I'm interested.  

Kudos for starting at your age, Ryan! 

Remember a CAP Rate is the capitalization rate, a quick measurement of risk and is dependent on the NOI which is calculated with vacancy/collections. This is assuming the cash-on-cash return without financing.

Lower CAPs (7 to 4) should reflect a minimal risk investment - great location, healthy appreciation of value/rents/etc, strong tenants, etc.  Traditionally institutional money loves these investments because the hold period is longer than a traditional individual investor.  

What I think she is saying is that MOST listings with brokers will have their marketed pricing based on proforma and NOT the actual/current NOI. Even in dumps of apartments they market at 7% CAP after rehab but based on today's occupancy it is closer to 4% without the capital improvements that will be required to capture the rents the proforma marketed. So the CAP rate starts to dwindle.

In all the years I've looked at CRE with clients (in Texas mostly) I will say the revenue was based on any rent bumps in next 12 months, almost all leases are listed as NNN so 100% of expenses recouped, minimal vacancy/collection (10% or less) and previous year expenses. What happens when you actually get into the due diligence is some leases are up for renewal or MTM, not all are NNN leases but NN or NNN with restrictions, collections has been a concern, etc. So the advertised price is $2M or 7% CAP but the actual is $2M for 4.5% CAP. This example is clearly not apartments but is generally true in CRE.

Long story short - don't buy distressed properties from retail sales brokers because you'll over pay or they'll keep denying your offer.  There are deals with wholesalers.  Loopnet is where listings go to die - terrible resource to find properties for sale.  

I'm going to echo a couple comments by saying that within the Austin city limits is tough to find deals if you're relying on wholesalers and not sourcing yourself (my opinion).  However there are plenty of areas nearby with opportunities - Cedar Park, Leander, Georgetown, Round Rock and it's a bit of a drive but completely worth looking at Waco, Killeen/Harker Heights, and Temple.    

Agreed, Christos, I'm all about a 10-20k shopping center in a neighborhood dense area with 5+ year leases without a single tenant commanding more than 30% of the GLA. $2M 9-10% CAP price points. So much less fuss than a ton of rental homes.

Welcome!  Houston is still a healthy market even if all the stats are showing a slowdown.  Plenty of opportunities and there are a TON of real estate investment clubs in the area to attend for free, learn and mingle with others in the industry.  There is a women's investment group that might interest you on 1/28 that I'm attending - message me and I'm happy to share the details.  

Upfront fees without a firm approval for your loan sounds... odd. The only fee we charge upfront is the appraisal to confirm value/the investment. Because we are local we run our own comps to confirm ARV to ensure your nor our time is wasted on an unrealistic opportunity. Our analysis is wrapped up in an hour or less without upfront fees nor "oddness".

It's been recommended and I'm going to echo the comment - use a local lender (HML, priviate) because they will partner with you on the loan and may have valuable insight about the local market that a nationwide group wouldn't know. IE: I've closed a number of deals in the area and have the "inside scoop".

Welcome!  Glad to see more Austin folk.