All Forum Posts by: Kimber Lockhart

@Thomas Shepard Thanks for asking!  

The original linked property was a great learning point: the agent repeatedly indicated he was unable to get in touch with the owners to consider my offer, which was competitive enough that it should have triggered a counter. It's hard to say what was really going on, seemed like fishing the market. The answer to what I was missing with a MLS property vacant and able to cashflow without a lot of work is that it wasn't actually for sale at that price.

I've since acquired 10 units in the East Bay (4 in Richmond).  I'm finding that my cashflow numbers are modest compared to the claims others make on these boards.  I'm not interested in investing tons of time finding bragging-rights deals, but am happy with the buy and hold approach.  I'm centering on a philosophy of finding a middle ground between cashflow and appreciation.  I have been able to find buildings in the black cash-on-cash by a few percentage points that (I believe) will also appreciate due to proximity to the Bay.  We're not talking SF-over-the-last-10-years appreciation, but I'm interested in predictable investment returns, not gambling.

Upon transfer, we couldn't get all the estoppels signed, so I expect we'd be hard pressed to get new leases signed in a timely manner.  It's a good suggestion though, and something I should have at least tried as a matter of course when I bought the building.

I bought a Bay Area rent controlled fourplex earlier this year, and while working on a loan for a new purchase, the underwriter is refusing to consider the income for the fourplex without documentation of the transfer of the leases.  I don't think I have such documentation -- under rent control a new owner must assume the existing leases unless eviction criteria are met.  

I've provided documentation of annual rent increases and history of rent payments, apparently not to the underwriter's satisfaction.  Anyone faced this or have advice on what documentation I could try?

Thanks!

I am currently focused on SF East Bay (where 10% COC is very difficult) and TN outside of major metro areas (where 10% COC is absolutely feasible). I am also considering adding a middle market -- I invested in Nashville a few years back before it got frothy. Each market has tradeoffs, and I'm debating the right balance.

@Kenneth Garrett Agreed COC is unlimited if you don't leave much cash in and have reasonable cashflows. I've looked at a couple of deals that could look like this. On your buy and holds, assuming you don't have any cash in after refi, how do you determine how much cashflow is sufficient?

I'd love to hear from others to learn more about how you think about Cashflow/ROI per market. Thanks!

In my rental deal evaluation, I'm doing a detailed analysis of income and expenses per property.  I'd like to get some opinions from experienced investors on what cashflow thresholds they are looking to achieve.  Here's my thinking:

• In a higher appreciation area, I still want to see cashflow from day one to limit risk, but the total returns are more influenced by appreciation, associated rent increases and higher property values (which result in larger mortgage principal reduction and higher tax depreciation).  
• In a lower appreciation area, most of the returns are cashflow, with a lesser amount mortgage principal reduction and tax depreciation, so I'd want to see day one cashflow be higher.

I'm currently using 3.5% cash on cash return as the threshold for high appreciation deals (enough of a cushion that I can absorb unexpected issues, but low enough to be feasible) and 10% cash on cash return as the threshold for lower appreciation market deals.  

I'd appreciate hearing from a variety of investors what thresholds you use to determine whether to do a deal in what kind of market.  Thanks!

Note: In my situation, I'm looking to maximize total returns over time in comparison to other types of investments. While the cashflow short term is nice as it can be reinvested into more doors, I'm not dependent on it, and can wait for longer term returns.  I'm including down payment and rehab costs in the invested cash calculation unless I plan to refinance post-rehab, and then I'm including just the refinanced down payment.

I'm closing on a property with existing tenants (in Oakland, rent controlled).  There are no known leases for a couple of units.  

I'd like to ban indoor smoking, remove some no-op vehicles and organize storage.  I have heard it might be possible to enact a smoking ban that isn't on the lease and remove safety hazards.  Anybody been here and have advice?

I'm about to close on a fourplex with a hefty pest report, but only a limited amount that's structural.  It's intended to be a long term hold, so I have interest in resolving deferred maintenance.

I'm working through what I need to get done, and could use some advice on what I should have the pest company do, what I should hire a contractor for and what I should take on.  I'm fairly handy, but new to rehab, and I've heard stories about how much pest companies mark up their work.  Here's what I'm thinking right now:

1. The pest company should take on treatment for termites, framing work, and anything that requires chemical treatment.  There's some sheathing behind stucco that has termite/fungus damage they should probably take on as well?

2. I should hire a contractor for more extensive repair/rebuild of balconies and stairs.

3. I (or my handyman) can take on replacing trim, window sills, etc. that have been fungus damaged.

Does that makes sense?  How far is it worth going to get competitive bids for the items the pest company should take on?

Just in case you're curious, the property seems to be not actually for sale.  Numbers work well, but if you can't buy it, it doesn't exist.

You're right, I'm using a slightly out of date investment property rate, and was told I'd need to put 25% down.

I pulled rents from Rentometer, which is reasonably accurate for my other properties, but I will need to do actual local comps.  Rent seems to be moving quickly in the area -- any strategies for estimating?  I've found comping on Craigslist seems to run high as it shares only asking rents not rents for units that actually fill.

Assuming a 10% vacancy, taxes at current property tax rate + insurance it still leaves $1000 or so a month for other expenses and cashflow.

I'm a fairly new investor looking at multifamily in or near Richmond, CA.  

I find a number of properties like this one: https://www.redfin.com/CA/Richmond/4519-Taft-Ave-9...

It's listed at $783K.  Three units vacant.  That's $2500, $2000 and $1500 market rents.  = $6000.  With 25% down, mortgage is $2750.  

That seems to pass a sniff test for cashflow.  It's not that easy -- what am I missing?