All Forum Posts by: Mike Campbell

All.

It’s been a good minute since I’ve posted or asked a question. (Been Sometime for the oldies out there, LOL)

Moving from one state to another, looking to sell then buy where I land

Is there a Cap rate worksheet out there?

Anybody with advice or experience in doing what I'm planning please pass on you experience and lessons

Thanks

Mike 

Karen;

I'm very interested in learning more about BDX, MLS feeds or any other type of new home construction marketing you have knowledge of

Respectfully

Mike   

Jamie.

I have limited experience with Floodplain and Floodway Homes.

Bought one knowing was able to have removed with a $300 survey

Know a builder bough some ground in town in floodway/plain, great deal. Had survey done went through red tape with FEMA as to what would be needed to bring homes out of said issues? He did what they said, built sold homes, 5 a year, doing great, then FEMA came back and changed the rules of the game and put half of the homes he built back into the floodway.

All those home lost half of their value. FEMA is not to be trusted.

The biggest problem is the flood insurance which is added onto the regular homeowners insurance, it's a big risk and expensive for homeowners to take, one flood and that’s it, the re sale value isn’t there.

……So…. What has my limited experience with this issue has taught me.

Run don’t walk to the nearest exit and don’t look back.

My fellow BPrs;

I have decided to use the equity that I have in some of my properties to start building Homes again.

The plan, is to us the funds created by the sale of the homes as the down to buy more apartment buildings, to get where I want to go a little faster.

What I don’t wish to do is refi which increases my monthly payment and incur all the rifi cost

Now to the question;

The bank that currently holds all the properties wants me to refi the properties to pull the cash out and use it as the security for the loan to build.

Is there another way, a better way the bank can do?

Why can’t they simply use the properties them self as collateral, without the refi

Any suggestions, better Strategy, would be appreciated.

Respectfully

Mike

George

Bad idea period; A new car is the worst investment that can be made, you’ll end up with payments on something that does not produce money, but cost money, then the value of said car will drop dramatically and by the time you get done paying it off, it’ll be worthless, you could have used that money to start investing.

Buy a beater for cash, save every penny you can by not buying shinning things that “DO NOT PRODUCE MONEY”. NO CREDIT CARDS, if you can’t buy it for cash, you don’t need it. Buy everything you can used out of somebody’s garage sale. Live this way for 20 years, live like no other today, so someday, you can live like no other, it’s the best way to get where you want to go.

The banks are interested in more than just your “ GOOD CRIDET” they want to see debt to earnings ratio, how you live your financial life, is the property you’re going to try and buy a good deal for them and you and what if any money you have to put in.

Get to Know Dave Ramsey, read and listen to him, its sound advice for the young to get started in life.

Hope this helps

Mike 

Jennifer Dean

In my humbled opinion, I have learned the “Cap Rate” is just a rule of thumb, because it does not consider all expenses and other factors. After running all kinds of numbers from multifamily for sale, I have come up with the best scientific formula of all time and for you and for you only, I’ll give it a way for free.

K.I.S.S it.  What really matters at the end is, what is your cash on cash return that’s what we’re buying. Is it 10%,15% or more you have to decide what you want.

So, Expense's minuses total rent, (this means after vacancy rate is subtracted) – = NOI – P&I = cash flow / by down payment = Cash on Cash, in other words how much Money are you going to make each year on your money……..

Expenses Are;

Maintenance anything you can think of. The seller isn’t all ways going to be honest. Trust but Verify

Insurance: get a quote.

Property Management: Yes you won’t have one today. But our goals are to someday need one. If you don’t figure it in now than it will come out of your pocket later. Does the PM fee include snow removal and or lawn care?

Taxes; County has them on record;

Common are utility’s; Get a couple years of utility bills

Garbage;

Then there’s the economic vacancy rate to consider, is this building at the upper end of rent than everybody else, is there room to move up or down if needed. There was a nice discussion regarding this topic on BP.

Then I add a five year increase in all expense’s to see where the building would be at if I didn’t or couldn’t increase rent in those five years, sure would suck at the five years mark, expenses went up and you couldn’t increase rent.

Of course don’t for get to consider how old the building is, appliances, HVAC, the older it gets the more cost to maintain.

Then I consider the seller might not totally being honest and add a little to the total expense just in case.

And Boom, keep it simple silly

I'm sure if I missed something the good people of BP will help and correct me

Hope this helps

 @Linval T WOW, thanks, very nice

When buying a multifamily with a du diligence period, what is your list of things you are looking for, verifying, double checking and other?

Getting close to making an offer, the selling agent said owner wants to know what I will be looking at during the du diligence period. That got me thinking about a check of list that I should have, so please help me develop one.

Thanks you for you’re input  

When buying a multifamily with a du diligence period, what is your list of things you are looking for, verifying, double checking and other?

Getting close to making an offer, the selling agent said owner wants to know what I will be looking at during the du diligence period. That got me thinking about a check of list that I should have, so please help me develop one.

Thank you for you’re input