Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Paul Smythe

Paul Smythe has started 55 posts and replied 249 times.

Post: Who produces the best market reports in Commercial Real Estate?

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

@Blake Alexander I'm fond of the IRR reports (irr.com). They're a little slow like CBRE (waiting on Atlanta's 2018 report right now), but I'm a big fan of the reports they put together. Lots of good information that is easy to navigate to.

Post: Push For More Cash Flow or Get a Great Tenant in Place?

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

@Derek Clark ahh, that makes a lot more sense. Owner financing changes things. Apologies if I missed that. In that case I think you're on the right track and sounds like you've got a good investment in place.

Post: Push For More Cash Flow or Get a Great Tenant in Place?

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

My understanding of the situation is that @Derek Clark does not yet own the property. Is that correct?

If that is the case, maybe it's not worth buying. I completely understand the value of a stellar tenant, but why put your cash into something that won't give you a return? Why bother? Put it in something that will give you a real return so you can continue generating more cashflow and purchasing more properties.

The appreciation play here can be valuable, so if you really like the area then I can see why you would want to go for it. Just be careful is all I'm saying. It would be rough if you jumped into purchasing an asset where you were essentially breaking even and hoping for the market to help turn it into a good investment.

*Disclaimer that every person has different goals and situations (and there are always a million other different factors to consider), so it's hard to say exactly what you should do. I just don't see the appeal in buying this property from a general investment perspective, especially when you're already considering giving concessions before you've closed on your purchase of the property.

Post: Push For More Cash Flow or Get a Great Tenant in Place?

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

@Derek Clark I'm not sure I love the thought of purchasing a property to then cashflow $100/month. Are you just looking to park your money somewhere? I'd look at your cash-on-cash return and see if it's really worth it. Also consider what the property will be worth if/when you sell it. Your commercial property will be valued based off of the income it generates. If you're making $1,200 annually then you'll have a harder time selling it for anything worthwhile.

I'm assuming your calculation includes maintenance, but does it include building up reserves for capital expenditures like a new roof? One unexpected issue and your $1,200 profit for the year disappears.

That said, I do like the idea of putting in a long-term, "set it and forget it" type tenant. If you do go with them, I agree with @Jeff Kehl on the 3% annual rental increase. Put it in the lease that the rent increases by 3% each year. That way your cashflow will continue to rise and could be a little more respectable in 3-5 years.

Post: Should I really sell my house NOW?

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

I'd like to hear some input on this thread, so I'm bumping it.

@Alex Trejo where would you live if you did sell?

Post: The Real Estate Investing Index Card

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

Just thought of another important one:

3. Tenant selection is crucial. Good tenants mean more money in your pocket and less headaches.

Post: Advice Needed: Selling CRE in Central CT

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

1. Admittedly, I'm probably a little biased because I'm a commercial agent myself, but I do think a broker with specific knowledge about your market is going to be the most effective way to sell your property.

2. Check on searches such as Loopnet to see if anyone is selling similar properties in that market. You could also drive around the area next time you're in town and see which brokers are the most active (e.g. have the most signs up).

3. If you really can make more money selling it as a development opportunity and not a motel, make sure it's being marketed properly as a development opportunity.

4. Not sure how long your engagement was with either broker, but sometimes these types of transactions can take a little while. Patience isn't fun, but it can be necessary sometimes. The good news is that your parents are still generating income on the investment and aren't bleeding money.

Also, @Joel Owens might be your man here. Not sure if he's in CT, but he would probably be able to help you figure it out.

Post: The Real Estate Investing Index Card

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

I was recently listening to a podcast that had a guest interview with University of Chicago professor Harold Pollack, and I found it very interesting.

The way I understand it, a few years ago he was discussing general financial literacy with an author and said that "the best financial advice for most people would fit on an index card." Shortly after that conversation, he actually wrote 9 rules on an index card to demonstrate the theory (you can find the card here: https://media.npr.org/assets/img/2016/01/07/index-...).

While the 9 rules weren't comprehensive (and he actually later tweaked them for a book he wrote with that same author), they provided people who didn't necessarily know a lot about investing with a good baseline when it came to managing their personal finances.

It got me thinking about what rules a similar index card would have on Real Estate investing, and who better to ask than the BP community?

So, BP, what rules would you put on The Real Estate Investing Index Card? I'm sure we could fill an entire book with different rules, but what would be the main rules that, if followed, would steer investors in the right direction. I'll start it off with a couple:

1. You make your money on a property when you buy

2. Be sure to maintain a reserve account

Post: Seasoned MF investors lend me your eyes.

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

@Michael O.

This deal seems to make sense financially. The numbers all make sense. 40% expenses is a tad low, but still within the reasonable range. 10 CAP is generally very good.

My concern would be the area. If you don't feel safe in it then I'd be hesitant. I couldn't tell you anything about the path of progress in your area, so be sure to check on that with someone local who isn't trying to sell it to you.

Side note: be sure these are definitely actuals. It's odd to me that the vacancy is exactly 5%. Looks a little like pro-forma numbers.

Post: Purchase from a wholesaler

Paul SmythePosted
  • Investor
  • Greenville, SC
  • Posts 269
  • Votes 186

@Wave Taylor if the numbers work then it doesn't necessarily matter who the source of the property is. You do have to be wary of the numbers wholesalers are giving you because they're usually inaccurate and make the deal look better than it is.

A definite pro of a wholesaler is they do the searching for you. You'll pay a slightly higher price because of it, but it can be a big time saver.

Are you dealing with multifamily wholesalers?