All Forum Posts by: Michael Kistner

@Immanuel Sibero

NOI/Purchase Price = CAP Rate

Current NOI - $47,926

  Purchase Price - $525,000

  Cap Rate 9.1%

If she increases the NOI by raising rents or decreasing expenses she'll increase the cap rate which should increase the value. You'd still need the demand.

@Shweta Patel

From a numbers stand point I'd continue looking at it. The ARV should be higher if you're going to be renovating it.

    Have you requested the rent roll? If so where are they compared to market rents?

How much would it cost to renovate it and what would you be able to increase rents to? Just to see if it'd be worth it, possibly increase the CAP rate if it's 5 units or more.

Can you lower your expenses compared to the previous seller? Again, trying to see if you can increase your CAP rate and drive the value up if it's 5 units or more.

    How's the surrounding area?

   These are just some of the initial questions I ask myself when looking at MF's. Good luck, I hope it works out!

@Dylan Henry Main

   Can you do the work yourself? If you can't then you'll need to figure out how much you can afford to put into a fixer upper. Finding a fixer upper can be the easiest way to gain appreciation. If you aren't buying a fixer upper I wouldn't count on appreciation. If the numbers don't work I wouldn't bet on it to appreciate, it's just an added bonus if it does.

   How quickly you find tenants will depend on multiple factors; how nice is your place, how nice is the area, and the time of the year. When you look for an agent to help you with your purchase ask them if they have any experience in this area. If they do they should be able to put you in contact with property managers and anyone else you may need to know.

  I'm not sure if you're just looking for triplexes but I would keep an open mind for any multifamily 2-4 units. It may give you more results and I'd take a duplex in a nice area over a 3-4 unit mf in a bad area. Know your numbers and continue looking at deals. You'll find something. Good luck!

You’re absolutely correct about the current economic debt bubble. And it’s something to follow that’s part of the game. I just wouldn’t avoid investing because of loose predictions. 

I always find the predictions funny because it’s always a general statement but every market is different. Not every market will get hit the same way. 

And @Cassi Justiz is absolutely right. Building those relationships are key when the market is up.

@Account Closed

     Predicting another dip is a fools errand. You can find so much data pointing to a coming crash or a healthy economy. Stick to sound investing principles and you'll be fine in any market. Buy below value properties that you can force appreciation. It's a lot harder to do right now but it's still possible.

     "Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffet

@Jose Ortega

   Build a relationship with them first, make sure you can trust them. Any professional, doesn't matter what industry, will do the right thing. Their reputation means too much to them. With that said, get everything in writing and have an email trail following the progress of the deal. Even if you talk on the phone send a quick email restating what you had just talked about and the next steps. That way if something shady ever does happen you have proof that you had an agreement.

- Mike

🤞🏼 Hope it works out! Remember though, don’t get too caught up on one deal and get tunnel vision, I’ve seen investors miss out on deals because they were so determined to make a different one work. 

@Bryan Jacob Heilman

   That’s unfortunate you guys went to that meetup only for them to want to sell you something. @David Greene had a meetup in Brentwood last night as well that had great content for starting out. He’s putting on more so look for those and I recommend going to them. 

 In the mean time if you and your friend want to grab a beer and discuss real estate let me know. 

- Mike

@Ahmed Sublaban

  Definitely don’t pay for something like that. Do you know where in Sac you’re trying to invest? And have you thought about staying in Lodi? I house hacked a triplex here and it’s worked out great. 

- Mike

@Rachel Hall

 I agree with @Craig Sloan I'd look for a 2-4 unit property and start that way. You can put 3.5% down and have 70% of the current rent count as income. If you can't find a multifamily I'd consider house hacking a SFR or airbnb it if you can. Good luck!

- Mike