All Forum Posts by: Nate Burgher

Your math looks correct. As the Cap Rate % goes down, the Property Value goes up. 

As for how a commercial lender values property, Cap Rate to my understanding is just one of a few methods the factor in to valuation. But I'm not an assessor or lender, so I could be wrong. Just what I've been told by other investors.

If I'm reading this correctly, even if you were to raise the rents $200 on each unit, you're still ~$900 in the hole each month? That makes zero sense to me if there's not a massive value add opportunity here, which it sounds like there isn't.

Welcome @Sam Runge! You are at the very beginning of a huge worm hole, and BP is a great motivator to keep going!

I see your frame of mind on this, but on a personal level I never want to use a HELOC for a major purchase or to pay off other debt. I could be totally incorrect in the efficiencies in my frame of mind, but I don't want to leverage debt (mortgage) where the value can change any day based on the economy and current housing market. If you would have done that 13 years ago before the market crash you could quickly find yourself in a dark place financially. Just my opinion, no science or hard math to it.

Welcome @Antonio Martinez!

Hey Robert,

Welcome to BP!

It's hard to give you great feedback on this. The numbers look decent, but it also depends on the market. Can you get $1700 / month ALL DAY & EVERYDAY? Or is that a stretch # for you? What other market info can you share? Or do you not know much about the market? If so, do your research. Call property managers in the market you're looking to buy in, drive around the neighborhood (and a 2nd time at night) or look at google street view, check out Hotpads.com or Rentometer to see what current rents are in the area, check out city-data.com to get economic info for your area, etc.

To answer your question based off the numbers, looks great. If you can get 1% the purchase price of the home, per month, in rent, you should be good, assuming there's not a ton of CapEx you have to worry about.

Hope that helps! I'm sure others will chime in too!

There are tons of markets out there that meet your qualifications, but you'll need to start looking outside of your local market. Read David Greene's book on Investing in Long Distance Real Estate, it will help you a ton in the future. It's advice that I need to take too, but haven't yet.

Hey BP Members! 

I am utilizing the BP Landlord Forum for my most recent property and came across the section that designates the amount of insurance the tenant needs, and I'm unsure on how to determine the amount. Can you chime in with any advice? The verbiage is below...

"Tenant shall, at Tenant’s sole cost and expense, obtain renter’s insurance covering the full value of all personal property of Tenant in the Premises, and providing liability coverage to Tenant in an amount not less than $_________, which policy shall name Landlord as an additional insured. Tenant shall maintain such renter’s insurance at all times during the Term of the Lease."

Thanks!

@Robert Silvernagel, curious if you found success with any of these referrals?

Cash buyers only?