All Forum Posts by: Vlad Denisov

Because of this delta, NOI increases every year and Cap Rate as a result. But NOI can't grow infinitely over time, right? What are the reasons this process stop and when should we expect it to stop?

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Let's say we have our Gross Potential Rent and we add to it Utilities and Misc. Then we have to exclude Physical Vacancy and Economic Vacancy to get to our Gross Operating Income, right?

1. What info do you use for Utilities and Misc? It seems that it hard to predict it, especially if you are going through value add.

2. Why do we first add Utilities and Misc and then subtract Stabilized Vacancies out of this number? Why not in the other order?

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Originally posted by @Marc Winter:

That sounds like a question on a licensing exam.

Hi Marc,

I want to figure it out for myself. Don't have any exams :)

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We have 8% pref and plan to refinance into GSE on year 3. We return 50% of the capital to investors. Do we split this payout like any other cashflow?

Let's say we have a cumulative 70/30 split. Let's say year 3 brings us a total of 55% (income+refi). If we had 2% return in the year 1 and 4% return in the year 2, does it mean that we have to give investors in year 3:

a) 8-2= 6% - difference they didn't get in year 1

b)8-4= 4% - difference they didn't get in year 2

c) 8% - for the year 3

Thus, 55-(6+4+8) = 37%

And from these 37% we as GP get our 30% split? So, 37*0,3=11.1%

Is it correct?

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What does it mean to be traded as a portfolio?

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I just heard Cardone saying, that it might be good to buy when market is overbuilt. His argument is that once it's overbuilt, they stop building anymore. I can't get the idea - how can we benefit from the fact that there are no more constructions in the city, if it is already oversaturated with supply? Anyone's getting it?

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Originally posted by @Joshua Netzer:

Hello World,

I’m new to Real Estate Investing and looking to build a network in Tempe, Scottsdale, Chandler and Mesa area in Arizona. Does anyone know of places there are meet ups in this part of town?

Appreciate any help!

Hi Joshua,

Welcome to BP. Search for 'real estate investing' in your area on meetup.com

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Originally posted by @Justin Goodin:

Can some experienced investors with apartment buildings help me clearly understand the financing aspect of purchasing an apartment building. I am looking to purchase a building with 10-30 units anywhere from $700,000-$1,000,000. I want to purchase a property that needs mild to moderate renovations.

Will a bank require 30% down? Has anyone raised money from private investors or bought a building without using private investors? Depending on how the deal is structured, how will my private investors be paid throughout the year? I am looking to buy and hold the property, so what if I refinance the property and I do not receive enough money to pay the investors back. Any information, or a walk through the process of purchasing an apartment building would be greatly appreciated. Thanks.

Look up videos on youtube. I'm also looking for my first multi-family deal. There are lots of free info out there, I like commercial property advisors.

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Originally posted by @Mike Dymski:

IRR assumes the interim cash flows are reinvested at the projects total IRR. The interim cash flows can be reinvested in the subject property or in a totally different investment.

MIRR allows you to modify the reinvestment rate. For example, many companies will use their cost of capital/debt as the reinvestment rate for an MIRR calculation. If interim cash flows are not reinvested or used to pay down debt, it drives down the MIRR of the project.

Hi Mike,

I'm confused, because people above are saying that it doesn't matter and we don't have to reinvest it. What is it I'm not getting?

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Originally posted by @Sam Grooms:

@Vlad Denisov, You should not be looking at rent growth nationwide when underwriting a specific property. You need to look at market specific data, and probably submarket data, if available.

That aside, yes, I would consider the investment to have a very low risk of not being able to meet its debt obligations. I'm assuming that's what you're referring to when you say very safe (Note that I won't use the word "safe" when referring to an investment, as that could be taken as a guarantee by my investors, which the SEC doesn't allow).

Nothing is safe, everything is at least low risk, got it :)

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All Forum Posts by: Vlad Denisov

Vlad Denisov has started 21 posts and replied 57 times.

Post: Delta between future income and expenses

Post: Utility Income&Miscellaneous Income

Post: Do profits from Refi benefit GP directly?

Post: Do profits from Refi benefit GP directly?

Post: What does it mean to be traded as a portfolio?

Post: Buying apartments when market is overbuilt?

Post: New to the Bigger Pockets Forums and Real Estate investing

Post: HEY YOU!!!! Financing Advice with Apartment Building

Post: Why do we think of reinvesting for IRR?

Post: Projected income growth and rent inflation