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All Forum Posts by: LEONID ORLOV

LEONID ORLOV has started 8 posts and replied 42 times.

Jon, Joel, Giovanni,

Thanks for your time providing valuable feedback.

Answering to Giovanni question: "What attracted me to TX in the first place:

I invested in LA since 2009. I acquired 7 multi-family (3 to 5 units) properties with total count of 25 units. This worked fairly well, I was buying REO's renovating them and putting S8 tenants in the units with average return from 17 to 25% cash on cash return. However, I 2013 the music stopped .. prices went up so much that it simply makes no economic sense to buy the same properties at the current prices.

I learned from someone, who invests in TX apartments buildings. Per his information he does 20-30% cash returns on 40 and 75 units he bough over the last 2 years.

Such a high units count is totally new area of knowledge for me. My day job is Avionics Software Engineer, so I am trying to learn how one evaluates such commercial properties and how one obtains factual information to based investment decision on such class of properties.

The broker who proposed this purchase provided nice graphs with comparable curves of average vs. the property metrics, such as prices per sq.ft, vacancy, price per unit etc.

However, the report is missing correlation to a specific properties the comparison is based on.

Am I being unreasonable by asking comp information that is customary for SFR and low count multi?

If the answer is Yes .. how does one ascertains that he does not overpay for the property and determines this is a sound investment?

Thanks for the word of wisdom.

Kind Regards

Leonid

Post: Recently Sold Commercial Properties?

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

Thanks everyone for the feedback

I've been told that its actual numbers.

I am planning to request supporting data, utility bills, bank statements etc.

It appears that units are individually metered for electricity.

Post: New Member Long Beach California

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

Welcome,

This is a terrific site for newbies and veterans alike.

I like that people are willing to share their knowledge and experience without selling you anything ..

Like yourself I am in LA vicinity Hermosa Beach, I must say I evaluated LB back in 2009, but the numbers in S LA were much more compelling. I wish I would use these past 3 years more aggressively to buy properties .. as I was afraid more that I should have.

In 2013 prices went up so much, that I don't see any sense to pay 400 to 500 for a dinky property in S LA. One can't make reasonable cash flow from that, so I think speculation is starting again .. but maybe people who pay these kind of prices for the properties that I paid for 230k, know something I don't.

I am exploring remote properties acquisition management in places were one can achieve buy and hold strategy without relying on appreciation.

I would live to hear from people who successfully executed such feat.

How they located properties in far long places, how does one selects PM who will manage your properties without milking you (I had such experience with the property in San Bernardino, years ago)

I reside in LA my experience with self-managing 25 units located in 3-4 properties in LA. Pricing in LA compels me expand my horizons to out of state properties. I am very new to both, remote property acquisition and management and proceed on this path with a degree of trepidation. Although, many on this site report positive outcomes.

I could use a word of wisdom on how one proceeds with this venture without making predictable mistakes.

I would greatly appreciate feedback on the proposed deal:

Sale Price $980,00

Price Per Unit $35,00

Price Per Foot $41.26

CAP Rate 7.1%

GRM 4.86x

Building Size 23,750 SF

Lot Size 43,124 s.f.

Year Built 1969

City Desoto TX

Gross Scheduled Income $201,424

Other Income 703

Total Scheduled Income 202,127

Vacancy Cost (28,610)

Gross Income 173,517

Operating Expenses (103,682)

Net Operating Income $69,836

Post: Recently Sold Commercial Properties?

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

Jon,

Yes I am working with broker, he provided nice graphs comparing different metrics, sq footage, price per unit, etc. However, I would like to correlate this to a specific recently sold properties and thought there are independent sources of such information, like for SFR's on MLS.

I would appreciated a feedback on the proposed deal:

Sale Price $980,00

Price Per Unit $35,00

Price Per Foot $41.26

CAP Rate 7.1%

GRM 4.86x

Building Size 23,750 SF

Lot Size 43,124 s.f.

Year Built 1969

City Desoto TX

Gross Scheduled Income $201,424

Other Income 703

Total Scheduled Income 202,127

Vacancy Cost (28,610)

Gross Income 173,517

Operating Expenses (103,682)

Net Operating Income $69,836

Feedback would be greatly apreciated

Post: Recently Sold Commercial Properties?

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

Finding comparable sales to evaluate a purchase.

I am planning t purchase a 28 unit building in Desoto TX.

How do I find data to compare what are comparable CAP, price per unit, etc for recently sold properties in the area.

How else one determines if one signs up for a fair deal for commercial properties?

Post: What defines a Warzone?

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

I live in LA and invested in South LA since 2009, in the neighborhoods that I would prefer not to enter, even if I needed to get off freeway to get gas.

Over exaggerated fears of people, like I used to be, turned out to be very profitable for people who knew better.(a friend of mine gave me the info about someone who is profitably invested there)

Once I bought my first property, I have learned that this is a mix ethnicity neighborhood of working families. Yes, there are elements that are undesirable and I don't see were I live by the beach, but such are not a majority.

What surprised me first is the ratio of property price vs. rent. This neighborhood fetches 1300 to 1450 for 2 bd apartment. in 2009 I was paying from 230 to 240k for the property that has 3 or 4 such units.

The same apartment in my "hood", if I may say s,o would cost from 1800 to 2500, but the property price would be from 500 to 900k or more... You do the math.

To make long story short between 2009 to 2012, I bought 7 of 3-5 units properties and they cash flow very well. Suffice to say that I am making more money from the investment than my Aerospace Software Engineer salary.

I often joking that I am making more money from "doing nothing", than "doing something" .. maybe I have to start doing more of "nothing" and less of "something" :-)

Unfortunately I was not aggressive enough and did not buy more.. This would make the difference between working and needing to work. In 2013 prices went so high, that it makes no sense. No cash flow is possible. I have no idea who is paying 450k for a money loosing proposition in the dinky part of town, but they do.

Since what I get used to in RE .. and learned to love, is not there anymore. I would like to ask people to share their out of state investment, and what is most important remote Property Management experience.

Were you investing?

How you identify the properties?

What are the investment metrics? a cash flow

How you identify PM company that you can trust ?

Leads, advise in the area were good safe returns can be obtained.

Thanks for sharing. I found the site and people who contribute to be invaluable source of great information, because nobody sells .. pure information sharing .. make me warm and fuzzy .. and trusting

Thanks for listening .. and thanks in advance for the feedback

Post: What specifically do you invest in?

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

I am a buy and hold investor and was investing in LA in 3-4 multi-family units since 2009, and do my own management. These days LA market went too high to produce reasonable cash flow. I am interested in people sharing their experience in out of state investments, what are the cities, what are the metrics and how one manages Property Manager being far away.

Post: Owner Occupied blues in pricey northern New Jersey

LEONID ORLOVPosted
  • Investor
  • Hermosa Beach, CA
  • Posts 42
  • Votes 6

"The residence rent is also a tax deduction" .. unless you are claiming your residence as a place of business, (even then you can use only part of the residence that is exclusively used for business) .. its unusual