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All Forum Posts by: Jon Ostojic

Jon Ostojic has started 12 posts and replied 29 times.

Post: Evaluate this deal. Brrrr

Jon OstojicPosted
  • Seattle, WA
  • Posts 29
  • Votes 6

A lot of information is missing. You need to know your projected operating expenses and calculate your NOI. The value is the NOI (normal operating income) divided by the going CAP rate in the area (ask another investor or broker to find it). To calculate/estimate the NOI you'll need to know or have good estimates on the financials. You'll need to calculate all of your current/projected income and then subtract your current/projected operating expenses (not including debt service). The result is your Normal Operating Income, NOI.

So for easy numbers, a property bringing $10k per year NOI in a 10 CAP area is worth $10k/0.1 = $100k valuation.

So a property bringing in $20k per year NOI in a 5 CAP area is worth $10k/0.05 = $200k valuation.

What are the implications of separate tax parcels? I have a lead on 4 4plexes next to each other, each is on its own parcel. The owner wants to sell their entire portfolio including those 16 units, and an additional duplex.

So in terms of commercial lending and valuation based on NOI instead of comps, what are the implications? I know I can look for a commercial portfolio loan. But what if I do a value add and try to refinance down the road? Would I be limited to portfolio loans and residential lending, or is there a way to get regular commercial valuations and loans?

Post: Single Family vs. Multifamily Investing

Jon OstojicPosted
  • Seattle, WA
  • Posts 29
  • Votes 6

Come connect, learn and share with like-minded people about real estate investing. Each month we will discuss a real estate investment strategy or bring in an expert guest speaker. This event is for all levels. Our mission is to enable and inspire others to build financial wealth and freedom through real estate.

6:00 - 6:30pm - Mingle
6:30 - 6:40pm - Introduction
6:40 - 7:10pm - Topic of the month
7:10 - 7:30pm - Q&A/Discussion
7:30 - 8:00pm - Mingle

Drinks and light refreshments will be served. Hope to see you there!

Hello. I live in a HCOL area (Seattle), where the market is still relatively hot and a seller's market. My wife and I have started to seriously consider selling our house to move to a nicer area and find a place with an Airbnb unit. But we wife and I are picky about where we want to live, and something that ticks enough of our boxes is very rare. Plus we realistically are still months away from being ready to list.

However today an amazing option went up on the MLS today that I would buy in a heartbeat. But I realistically need the equity from my primary residence to close the deal. Putting in a contingency offer would be a waste of time as this will definitely sell to someone without one. We have enough equity between 3 properties (one listed) to put 50% down in theory, but they review offers in a week and it will 100% sell.

Are there any creative loan options to tap into equity and future sales to make this happen?

Post: Entry Strategy For First Time VA, SFH, BRRRR Investing - Advice?

Jon OstojicPosted
  • Seattle, WA
  • Posts 29
  • Votes 6

Seattle local here. Nic, there is a lot of money to be made in real estate in Seattle and the surrounding areas. But the numbers don’t pencil out to do it with cash flow. The strategy you’re describing is a good one one, but it only really works in the markets where it’s cheaper (month to month) to own rather than rent. And that just isn’t true in HCOL areas like Seattle.

If you can figure out a way to own a few properties around here and hold them for 15 years or longer, you’d be likely to make a LOT of money, but in appreciation, not cash flow.

Please don’t fool yourself into thinking a mortgage of $200 less than what you could get for rent is positive cash flow. It isn’t. Homes can be expense to own and rent out. Think about the fact that having to float for just 2 weeks—which you will with frequent tenant turnovers—will take All of your leftover cash flow for the year.

Get yourself a copy of David Greene’s book on long distance real estate investing. Chose the market that makes sense for your strategy. Or chose the strategy that makes sense for your market. But make sure your strategy and your market are compatible.

If you want to talk shop and discuss ideas/strategies, feel free to send me a message. 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

So I've been in contact with the sellers of this (partners, one of which is an agent). They have no debt on the property and have said they're open to some seller carryback. They are asking $499k. According to the county taxes they paid $345k 2 years ago. They've put money into updates and say they have stabilized the property. 

Euclid is interesting as there is an Amazon distribution center opening in 2019 which will bring over 1000 jobs to the area. I'm assuming 5% vacancy, but I don't know how realistic that is. I need to try to find out what vacancy in the area is.

The numbers seem mostly good, till you get to the utilities and taxes. There isn't much to be done about taxes. But I've heard of people implementing RUBS to make a significant increase in cash flow. Does anyone know if that is a realistic option here? Water/sewer alone are eating up $500 per month, which makes all the difference.

Any input on the numbers and what you might consider doing would be appreciated. 

Strange. I got what seemed to be reasonable numbers. I checked to paint a 2000sf house and it was $2200-4500. That seems in the ballpark. Nowhere near $25k!. To completely redo a bathroom I got $5300.  Again, in the ballpark at least. 

But it seems not everyone got reasonable numbers. Oh well.

Bryce. I have already found one, but thanks for the offer. 

So in researching rehabs I found this site, which claims to give ranges for various work and jobs by zip code. I'm just curious how accurate it is compared to what you all have experienced. You can estimate a specific job, like replacing carpet, or a project, like a bathroom or kitchen rehab.

Here is the site.

https://www.homewyse.com/services/index.html

If it's in the ballpark, then it seems like it could be a useful tool as you're getting started and looking to run numbers to make offers before you have a lot of deals and experience under your belt.

I've got a small condo in Abbotsford I'd like to sell in order to shift into other investments. Can anyone recommend a good agent? I'm located in Seattle, so I'm not local. I'm hoping I can find someone who can work with me remotely.