All Forum Posts by: Robert Rixer

Others have answered this question well - I will add don't believe a lender when they say "no one will approve you for this". I've been told this so many times by various lenders over the years only to go to another lender and them tell me, yeah no problem. Not saying this will be true in your case, but always question the status quo!

Fair points - I am saying percent value.

And sure thing on including Nashville on Nashville and Raleigh. I'm not married to the list, I was more trying to prevent people saying small towns like Fayetteville, NC or Huntsville, AL. Actually surprised Nashville isn't on that list.

CapEx is not included in NOI because it makes the property more valuable which lowers cap rate. If you have an old leaky roof, patching it (maintenance, include in NOI) does not improve the value at all. On the other hand, spending $30k to replace it with a brand new roof, in theory, makes the property $30k more valuable than the same place with the old leaky roof. Therefore its considered more of an asset and not an expense.

Getting a partner is your only option. No bank would finance that much for a first timer who doesn't know what they're doing. I'm of course assuming you don't have $7.5M cash and need a loan..

I had a similar case, a 3-unit on the front part of the lot and a 4-unit at the back - all on one PIN. Went through a similar hot potato with lenders, it ended up being Commercial. The one PIN was the deciding factor. Worth looking into if it would be worth more as split lots sold individually.

Agreed. To add to that, where high income people are moving. But that is generally one in the same as people who move state tend to be of higher income anyway.

Yes very fair point. As much as I hate it, the answer could really boil down to politics. Who is going to be in charge at the state and local level and how do they compare to competitor markets.

As I'm only truly exposed to my local market, I'm curious what people think is the most undervalued major market at the moment compared to 5 years from now and WHY. 

Keep it to the top 30 major metro markets (Austin is 30th, so nothing smaller), here is the full list. https://www.thoughtco.com/largest-metropolitan-areas-1435135. Providing BP doesn't go out of business, it will be interesting to look back on this in 2029 and see who was right/closest.

Personally, I think it's easy to go with Florida or Texas city, but they appear to already have a lot of the near term appreciation built in to today's prices. I'm going to go with a dark horse and say Minneapolis-St Paul. My reasoning is Midwest cities are often overlooked, downtown hasn't fully recovered from 2020 yet and it quietly has a lot of new construction, expanding suburbs and has major corporate headquarters (Target, Best Buy, 3M).

P.S. I'm a cash-flow investor not a speculator so this is purely academic

Insurance varies wildly, especially the past year the industry has been crazy and a very tough market especially for lower end properties and in states such as CA and FL. Best to talk to someone local rather than a national forum.