All Forum Posts by: Mark Jones

I don't understand. How can I calculate IRR an COC without knowing how much my debt costs?

Hi,

Someone told me that he can't give a target IRR without first having a loan bec IRR is affected by debt so I was wondering which return metrics are and are not affected by debt? And how can you underwrite using the return metrics that are affected by debt without having a loan in place?

Thanks

Hi,

Is there a difference between commercial and residential RE when it comes to property taxes? Do they have the same rates?  Are there any differences between small or large multi?

Hi,

I understand the appeal of a core investment is that it has less risk but where is the money being made? To get back the capital investment just from cash flow can take a very long time and if there isn't a value add play or it's not in a very hot appreciation market how are you making  (more than a little) money on a refi or sale?

Thanks everyone for the great replies. I wasn't specifically asking about IRR. More like when @Lane Kawaoka wrote that he needs a minimum 13-15% IRR how did he reach those numbers. Why is that the minimum. If the metric you use is (for example) equity multiple or YOC how did you decide which returns are worthwhile for you? @Taylor L. wrote nobody can tell me what my goals "should be" but I need help in deciding what numbers I should be targeting.

Hi BP,

I'm trying to get a better understanding of return metrics. I don't want this to turn into a thread where people ask me what type investment I'm looking at and giving me the numbers. I want to get the mechanics behind calculating returns so I can learn to get the numbers myself. For example why should I target a X IRR as opposed to a Y IRR?

If someone can point me to some resources for this I would appreciate that as well. 

Thanks in advance!

Hi Agents,

I'm sure any successful agent gets plenty of calls with a brief introduction and a list of criteria. What can a potential client do to stand out that will make you excited to work with him/her?

Hi,

I'm currently looking at a large multifamily deal in what is at most a C market. Right now the property is getting hammered on bad debt. Obviously some markets are going to be more prone to this than others but is there a way to check market delinquency rates?  I want to know my chances of not having these issues if I get rid of the nonpaying tenants.

Thanks

Sorry I wasn't clear. I understand how the rule works. I'm asking for the math on why 1% as opposed to 1.5 or 2%

The 1% rule is a nice easy metric to use. What's the reasoning behind the number 1%?