All Forum Posts by: Mallikarjun Reddy Pateel

@Matt Devincenzo I'm just learning these Financial Concepts. always Easy & Challenging at the same time to understand

@david 

@David Brent thanks David, I do googled this topic before posting here as u said there is no clear answer even on those articles. but now i'm getting little bit of sense on this topic. anyway for CRE prices are in direct relation with NOI so debt will be considered as second part i Guess that still kind of have Impact and No impact on Property Values based on supply and Demand and future Economic factors not just the Interest rates

if you're Purchasing 10-30 Year Buy & Hold Multifamily do you factor in Future Interest Rates? what happens to the property values when Interest rates rise? do they worth more or less? I just can not get my head around it. 

@Kevin Agunbiade   Hey kevin, i meant to say Idk whether that's legally feasible option or not to live in basement others who done house hackig in JC knows better. Good Luck with that!

I can't advice on basement living.curious what does the numbers look like? do u breakeven? or do u cashflow? primary markets like JC even if you have to pay your portion of rent to breakeven it's still a win for JC

@arn 

@Arn Cenedella 

totally agree with what you said, but I'm not saying I will jump on to new market every single day I do have my base markets which my primary focus will be. at the same time if there is an Opportunity I'm chasing it, Yes definitely this business is all about relationships I'm confident enough on data that's available online and the work I'm going to put in all the work exploring those opportunities. and you can do reverse engineering, get a deal first and then talk to brokers get your boots on the Ground. as u said it's not possible to be an expert in 8 different markets. but focusing on only one completely new market will definitely Possible. i think it breakdowns to how much risk one is willing to take

@Simon W. 

no i'm just considering the worst case scenarios. i'm not going to replace 5 tenants every year. maybe 2 a year even though there is still cost associated with it. PMC pretty much charge the same thing for Renewal fee as well

How do you decide that average tenancy period? 

How do you incorporate tenant Replacement fee in underwriting? PMC typically charge one month's rent. do you put down one months rent as concession for every unit?

this particular property meets 2.5% Rule, i have no problem paying for PMC. it still generates $100/unit in cashflow. I did very conservative underwriting even including 10% capex in my Opex. but my only problem is tenant  Replacement cost which is One months rent(avrg $500). it's a 5 unit property assuming I  have to replace my tenants every year. for 5 months I break even. 

wondering how do you incorporate these replacement costs in your spreadsheets?