All Forum Posts by: Kyle Majors

@Greg Dickerson If I am syndicating the deal and raising the money after going under contract how would I show an approval for financing at the time of offer? For example, with only one of my investors on board when we make an offer (since we may need one investor to agree to fund the emd) we may not be able to get a preapproval for the loan. But after getting several investors after raising the rest of the money we would be able obtain the approval. 

Hey BP, 

I was wondering if you are financing an acquisition with debt and equity, is it necessary to show proof of funds for anything besides your equity portion? 

Thanks!

Thanks @Greg Dickerson. Here's a follow up for you. When I underwrite it based on the T-12 and those rents are higher than most of the comparable rents, then the true market value from the appraiser will be lower. For example, if the NOI in a 7 cap area is 200,000 its value that I derive from my underwriting would be 2.86 mil but compared to a 7 cap area where the appraiser drops the rents and now the NOI is around 175,000 then the value would be 2.5 mil. Where would you start the conversation with that broker.. the 2.86 or 2.5? My concern is that I don't want to overpay unless I have to be competitive of course.

Hey BP, 

Just had a thought as I was reading through several appraisals that I found online. 

When underwriting a property I've been taught by @Michael Blank to apply rules of thumb for expenses to the T12 income and to then apply the market cap rate to find a reasonable price to pay.

While looking through these different appraisals I have found online, the appraiser uses the market rent (not the T12 rent) and typical expenses/vacancy to come up with a NOI.

NOI/Cap rate = value...So if an NOI for a specific property is achieved by higher than normal rents, I thought the property's valuation would be rewarded and be higher. And not be discounted by applying norms of that market. Should I be underwriting potential acquisitions with typical rents and not with the T12 income? Can someone provide some clarity?

Thanks BP!

Hello everyone!

Does anyone have recommendations for a trustworthy, reliable, and experienced multi-family property manager in the DC area?  

Best Regards, 

Hey BP!

I am looking for broker recommendations in the DC, MD, VA area that work in the multi-family space.

If you have anyone in mind drop a line! 

Thanks!

Hey BP!

My business partner and I are looking to form an advisory board for our multi-family investment activities. 

The ideal advisor would have experience as a multi-family investor (5+ units). 

If you or anyone you know fit this criteria, we would love to speak with you or them in more detail. 

Thanks BP!

Best, 

Hey BP,

I am a licensed realtor in DC and Maryland. I have a business partner (licensed in DC, MD & VA) and we are fairly new to the commercial real estate world. We are looking for someone that would be willing to act as an adviser on our future investment deals in exchange for a stake in the deal. We are focusing on multi family opportunities in the DC, Maryland and Virginia area.

Thanks in advance for your consideration.

Best,

Hey BP, 

I recently thought about how residential home prices increase. Homes are priced with the current market and over time, as demand increases, home prices are bid up. On the other side, as demand decreases, home values have to be dropped by the owner setting/accepting a lower offer. 

In the rental world, how do rental prices increase if this bidding situation doesn't occur? My guess was that landlords look at the trend of demand in an area through various reports and arbitrarily set new prices. I've thought about comps, but eventually there has to be a jump from the current comp price and I'd like to know how this process works and how those higher prices are achieved. 

Thanks!

Kyle 

Hey BP,

I initially thought that to value commercial real estate you just use the income approach and apply a cap rate. I have read about other methods such as the cost approach and the sales approach. I am confused in what way I should value commercial properties. Any experienced investors that can give their thoughts? 

Thanks!