All Forum Posts by: Michael G.

@Kyle Tusing

Yes, just considering selling this one for now. It’s in Denver, CO.

I own a condo with a tenant under lease for another few months. I’m thinking about selling it and am looking for advice as to whether I’m better off renewing the tenant’s lease and then putting it on the market vs. not renewing the lease and putting it on the market after the tenant vacates. My property management company can market the leased property to other investors, but I know there will be more prospective buyers if I open it up to the broader market, so I may get a better price. Maybe I just answered my own question…

FWIW

https://finance.yahoo.com/news/the-cities-most-at-risk-of-a-real-estate-bubble-ubs-203301974.html

@Eric Bilderback

100% - 2 condos, 2 townhouses; class A, average rent $2800/mo

I'm no real estate genius, but I stay focused on 2 simple things:

1) the real estate market is hyper-local. buy and hold in a market with a growing population and finite housing supply is a winning long term strategy regardless of what happens in the short term.

2) the fed's massive increase in money supply will eventually cause inflation and higher interest rates. for long term buy and hold, today's historically low rates create an opportunity for those that don't over leverage. when inflation does eventually come, I'd much rather be invested in real assets than cash or the stock market. higher interest rates may slow down real estate market growth, but landlords will benefit from growth in rents.

@Matt M. - thank you, would be great if you can share your spreadsheet! After speaking with a couple lenders, I realize that there's no way I can swing the downpayment, nor is the NOI high enough to meet the minimum required DSCR given how much I'd need to borrow. I need to go back to the drawing board and look for something priced lower with a higher cap rate...

@Tj Hines Thank you - I think I made a mistake calculating the CoC. If I put 20% down, I think my CoC comes out to 8.3%. If I lower that to 10%, my CoC goes up to 12.8%. I will read more about DSCR as well - appreciate your feedback.

@Greg Dickerson, thank you for the reply. Yes, rents are about $3k/unit - this is in Denver, Colorado where rents (and property values) have increased significantly over the past 10 years. My target purchase price is around $7.0-$7.5M. NOI is around $350k. My condos are in a more suburban area of Denver - I get $2,900/month for one and $2,400/month for the other. I agree with you that my biggest risk is that the market turns bad and can't service the debt...

I've been lurking on BiggerPockets for some time, but this is my first post. I have some real estate investment experience (two residential rental condos and one short term vacation rental) and am considering making the leap to multi-family. I have my eyes on a 12-unit townhome complex - all units currently under lease with gross rental income of about $36k/month. The building is relatively new, so I don't expect any significant maintenance expenses during the initial years. The thing I'm struggling with is the cash flow. If I'm able to line up interest-only financing, I think I'll see some modest cashflow (assuming I put 20% down) to the tune of $5k/month. But I can't figure out if that's good, bad, or somewhere in-between. The year 1 cash-on-cash ROI is 4.36% - is that the primary metric I should be looking at to measure the value of this investment? Are there other metrics I should be calculating as well? Thank you in advance - all advice is greatly appreciated.