All Forum Posts by: Patrick Hancock

All of our properties are located in Florida where insurance has increased significantly over the past year.  However, we have only seen the increase on our properties that are closer to the coast and our older properties.  The newer properties located in Orlando have not seen an increase. They are all longterm rentals. 

Pat 

@Brock Mogensen thank you and DM sent. 

Thank you all for the responses. I think I was looking for a simple answer to a much more complex question and it looks like there is not a simple answer. Some background and more details...I've been investing in residential properties for the past 20 years and currently have a portfolio consisting of 14 single family and one multi family (quadraplex) properties all located in Florida. I've also been a real estate broker for the same amount of time. I can accurately analyze residential properties in my sleep but over the past six months have started to focus on larger multi family properties. For example we are currently looking to acquire an 10-20 unit small apartment building as it seems a logical "next step" up from where we are currently. With that said, we have started to learn how to use the multifamily underwriting spreadsheets including the "napkin" underwriting spreadsheets. As we are still experiencing that learning curve I was looking for something that was perhaps even an easier/quicker way to look at initial numbers. We currently have a line of credit at 8.5% which is more of a bridge loan that we have to refinance any acquisition within six months with an approximate 6% interest rate. Our plan is to launch a PE fund this year offering a 7% annual return (all though 4-6% might be more realistic right now). I've got several variations of underwriting templates with some allowing for the calculating of investor returns and some that do not. The ones that do are too complex for where we are right now (we are looking for someone to add to the team that lives and breathes underwriting deals with spreadsheets). For example the one we have has allocations for Class A shares...Class B shares etc. I am trying to keep it simple and underwrite with just making sure we can pay investors the 7% annual return plus other expenses of course. Hence why I thought that perhaps as long as the underwriting shows a greater Cash on Cash return of in this case 15.5% (the 8.5% LOC rate plus the 7% investor annual return) the "debt" would be covered. Hope that makes more sense. @Brock Mogensen would love to see a copy of your model! Thank you!!! 

Hello! 

Have not yet found a rental analysis tool (such as the BP one for example) that allows for factoring in payment to investors.  Is the following calculation too simple to be accurate in trying to quickly analyze a deal? Scenario is I'm looking to acquire a property.  Interest rate is 8.5% and I need to pay my investor a return of 7% annually.  Would the break even point be a Cash on Cash return of 15.5% and anything over that would go to me? So if deal I'm analyzing shows a Cash on Cash return of 19%, then my personal Cash on  Cash return would be 3.5%? Accurate or completely off? 

Thank you in advance,

Pat

@Manny Del Val

Perfect!

@Jordan Alequin we purchased a 3/2 there back in September 2022. At the time we went under contract I think there were approximately 20 rental properties on the market for lease. Fast forward 30 days to close plus an additional 14 days for renovations there were now over 80 properties for rent in that area. Needless to say we did not hit our rent projections. That may have changed but that was our experience.

@Manny Del Val

Hey Manny!

We are close by in Orlando! Let’s connect as we are always looking at partnership opportunities.

Good morning, 

Brief history of where we are at the moment is my partner and I launched our investment firm back in 2021. Acquired six properties using our own capital. Once we had the six properties that were generating cashflow we now had a viable business. As we wanted to continue to scale we approached a bank and they provided us a line of credit in an amount that was satisfactory for us. However, the terms were there was a six month deadline from the time we closed on a property to when we had to move the property of the line of credit (which was an adjustable rate line) to a fixed line with a 25 year amortization. And we had to come up with the 25% down as it was a 75-25 LTV. Of course this is when rates began to skyrocket and even though we were cashflow positive having to come up 25% down for multiple properties would have more than likely drained the account. We then started to sell a couple of properties that we purchased late 2021 and had seen appreciation so we did make money there. The combination of the six month limit to before having to move to a fixed line (adjustable rate line is 8.5% and the fixed would be around 7.2%) plus the 25% down has been tough. Is this the typical structure of lines of credit? Any suggestions? Should I look into portfolio loans?

Thanks in advance, 

Pat 

Have seen a few threads regarding everyone's goals for 2023 and with that said how do you actually keep track of your goals? Simple spreadsheet? A particular template? We currently use Podio as our CRM...do you use a CRM? I'd like to step it up a notch from using "Notes" on my phone! 

Thanks in advance!

Pat 

@Andrew Freed and @Joe Villeneuve thank you both for your feedback.  Much appreciated! 

Pat