All Forum Posts by: Thomas Staub

Hello

I have a number of Japanese clients that are looking for financing to purchase rental properties. Does anyone have connections to firms that offer loans to internationals?

thanks

Tom Staub

@Mike M. Is spot on. Low inventory, strong demand, fee new builds coming, where is the downward pressure in markets outside of Seattle, LA, Bay Area, New York and a few other primary markets? Secondary and tertiary markets look healthy

This property is based in the best school district for high school, Grissom, 9 out of 10. The average property is selling for $184K and those are 4 bedroom numbers. This is a 5 bedroom. The average rents for a four bedroom is $1,325 so we would push for $1,375 or $1,400 per month. The neighborhood report is attached for reference on the quality of this neighborhood, without a doubt an A+. 

SQFT: 1,972

ARV: $175K to $190K

Beds: 5

Bath: 3

Neighborhood Class: A+

Age of HVAC: 2013

Age of roof: Mid-life

Estimated Rent: $1350-$1400

Purchase Price: $157,900

1 Yr Cash on Cash ROI: 11.2%

5 Yr Avg. Cash on Cash ROI: 12.5%

5 Yr IRR: 44.3%

Rehabs completed: New flooring throughout entire home, plumbing inspection (all functioning), complete lighting upgrade, ceiling fans, flush mounts, New stainless steel appliances, new dishwasher, new hood vent, Bathroom remodel, refurbished tub, upgraded electrical outlets and switches, refurbished kitchen cabinets, new counter-tops, power-washing of home and concrete, landscaping

youtube video (currently listed on the MLS at $169,900 but am selling direct at $157,900):

https://www.youtube.com/watch?v=MUQLEgOifPk

Email me for the detailed financial analysis

[email protected]

717.856.0018

Tom Staub

@Account Closed - $250 per door is the minimum on fully rehabbed and stabilized projects, net of vacany, but this assumes $100K purchase price per door. If you are acquiring distressed and rehabbing, then you should be closer to $375 to $450 per door once all said and done. Doing flips on multi-units is the way to go if you can do it. Try to wholesale for multi-units acquire at a cap rate in the teens, rehab, re-rent, stabilze and sell at market avg cap which is probably 6-8%. 

@Kevin Zhang - Posts about leveraging HELOCs and home equity are incredibly exciting. This is the moment to become a bigtime player or simply build a safe portfolio of passive income. $500K gives you so many options. 

I'd really avoid the primary markets that you mention as you're really too late unless you network and find a stellar off-market deal. Also, what is your strategy? You'd make a good deal of money by buying a distressed multi-unit 12+ units, in a B class neighborhood or a neighborhood that is up and coming, hopefully its more than 30% vacant. You go in there buy it at substantially above market average cap rate, likely around 9-10% at least, dump 10%-20% of the purchase price as capital so if you bought it for $1M, you'd put $100K to $200K into it, rehab it, stabilize new rents and tenants, hold for 12-18 months and either sell or hold and yield serious cash flow. 

A $200 to $300 plane ticket every two weeks gets you access to many other markets. We have partners making a lot of money in secondary and tertiary markets doing just this. Fly there, meet and greet with rehabbers and one local boots on the ground, then fly out every two weeks to see it thru, you could make a lot of money. 

You truly have so many options but the one that excites me the most is finding yourself a apartment complex in a distressed state and revitalizing it. You could also do a wholesale campaign to target motivated sellers for apartment complexes which gives you first access to offmarket deals. 

Wishing you success. Exciting times for you. 

Cheers

@Jay Hinrichs I agree. If units become and stay vacant, that’s hard to handle no matter the leverage really and yes, while not being leveraged would help, not earning money on invested capital AND collecting no cash flow will put anyone in a bind. 

At the end of the day it comes down to your strategy and being a prudent and ever-learning investor. If you're investing in primary markets, as you likely know, you should expect more volatility. Most linear markets dropped less than 10% during the great recession while places like Las Vegas, Phoenix, Miami and parts of CA got crushed. If your game plan is backed by economies that are diverse, connected to and ALSO disconnected from the general economy, you keep a close eye on leading economic indicators as well as coincident indicators, those telling the story thru all of the noise, you should be able to avoid such drastic results. 

Having reserves is also important. Ultimately having an arbitrary number of 50% down payment applied to all market types doesnt make sense to me but then again, maybe my strategy is different

@Engelo Rumora 

I would say 100% Leverage would be fine and a dream as long as debt coverage is healthy. Consider the implications of needing to reduce rent by 10-20% to keep the tenant or the place rented during an economic crisis.  Does your property still cash flow net of all expenses including your debt service? If so, why wouldn't you leverage?

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