All Forum Posts by: K James

Hi Neighbor!  That's the question I have.  I told him I'd like to see the numbers to support the projected appreciation.

My triplex was a $725k purchase and pending sale price of $927k. More like 1.6% than the 3% that's thrown around.  

You're right about the partiality.  That's how I ended up here.  I'm trying to look out for my best interest ultimately.

Thanks Dan.  

I'm thinking residential multifamily properties. I would like to scale up from my triplex.  The properties my agent has shown me here have been turnkey triplex properties $1.1-$1.35 mil (recently renovated without the rental history of the high rents they're said to command in the marketing material, in my opinion).  My triplex could use some upgrading but also has room for growth in rents which would bring is the same cash flow.  So I'm not confident in the deals they're presenting.  

With their numbers the turnkey property cash flow would be $1950/mo.  With my conservative numbers it could range $1000-$1700. That's with a $900k loan at 4.75%.  I owe $515k on my triplex at 3.625%, with $1200 cash flow and at market rents after some cosmetic improvement a potential of $1750. My property only appreciated $200k in the 15 years so the agent argues it's better to change neighborhoods to expect 3% appreciation per year.  I heard that figure 15 years ago and didn't get it so I don't have the same faith.  The pro would be less maintenance and capital expenses and potential greater appreciation. Cons higher purchase price, larger debt, higher rents might make it harder to keep rented at the top of the market, less room for rent increases,...in my opinion.

Sorry for the drawn out story.  I'm just uncertain about the next steps.  I haven't purchased investment property in 15 years and rode a tough rollercoaster with the crash.  Now it's rebounded my initial down payment and some gains so I want to make the best financial moves.  I wasn't even in the market until he approached me.  

Signed Uncertain in San Diego

I'm under contract to sell my 3-unit property in San Diego I've had since '04.  I'm looking to do a 1031 exchange.  I'm not impressed with the upleg properties my agent is showing me here.  The cash flow is nearly the same as I was getting for more debt at a higher interest rate.  He wants me to bet on better appreciation.  Are there out of state markets I should be looking in instead?  Where do I start?  I'll have ~$300k after the sale.