All Forum Posts by: Roger Smart

That is an impressive wait list!

Glad it is going well for you! Love the Dayton Market.

10 plex = 10 units

4 plex = 4 units

99% of the time folks are referring to multifamily residential units when they are tossing these words around. You may also here the terms duplex, triplex, etc. 

2-4 Unit properties fall into the residential category

5+ Unit properties fall into the commercial category. Hope that helps.

@Javier Rosales You will still want to use "like properties" to pull comps. If it's absolutely the only comp of that style in the area, then it will start to pull the value down in an appraisers eye because it is not typical for the neighborhood. I have yet to find a 2-4 family that I couldn't find at least a couple close comps. I know several agents use a "price per unit" comp analysis if they can't find anything. It's not perfect, but it gets you in the ballpark. Just make sure you are comparing like units for this, with same number of bedroom/bathroom and the same amenities. It makes a difference if there is washer/dryer in the units versus coin op machines in the basement, so make sure you pay attention to the details. 

What kind of rents are you projecting for the property? Do you have to make any immediate cosmetic upgrades?

@Christopher Sineno That was a very well crafted answer. I would like to add one additional detail, Dayton has recently added high end housing Downtown, so less units but more cost each, so the market stays strong. As those rental rates move away fromt he new development, they help to drive up the rates of the immediate surrounding homes in a sort of ripple effect. There is a huge chance to pick up great deals that will rent well.

The most attractive thing I find about Dayton is the barrier to entry is so low. Housing costs a lot less, which means you need to bring a lot less to the table to get started. I don't think I would be an investor if I was in another city. 

Last note, the Developer for the Water St apartments and condos just bought the Mendelsons warehouse (some 54,000 sqft 8 story monster in the heart of downtown) for $7.3 mil. Really excited to see the plans released for that.

1 to 4 family homes count as residential sales to your lender, so he will only care about the comps in the area, not the income. They may look at the total rent amount to compare that to other buildings with a similar total rent amount, but value is not based off of NOI (net operating income).

5+ Family apartment buildings fall into multifamily rentals that would be valued based off of NOI because it is a commercial property. A very brief example, property makes $10,000 per year, lender uses a 10% cap rate for that area, then the building is worth $100,000.

TLDR; 1-4 units, residential loans, comps matter. 5+ units, commercial loans, income matters.

I have gone through several evictions and so far the worst I have seen is just a mess of trash left behind, and other typical tenant damage items that come with C and D class rentals. I've only done a few foreclosures, and those have been the worst, ripping the breakers apart, destroying the cabinets, screwing the doors shut, driving through the garage door, etc. 

Congrats on getting licensed. You will have to hustle with sales. Most lenders require 2 years of tax returns to prove income before they will give you a loan. 

However, I have been successful at both partnering, and negotiating owner financing. Both of these options have allowed me to secure investments with little cash, and no banks. Hope it helps!

I did the Tony Robbins money app, and my Financial Security number is $48,000 per year, but my dream life is about $4,950,000 per year. So I guess you could say I have a long way to go. I haven't had a W2 job in a while, since sales agents are 1099 Employees. I also do property management full time but also as a 1099. I guess, in order for me to quit sales/pm, I would have to be making enough from my rentals to cover my $50,000 per year living expense, as well as have enough income coming in to keep investing, but I'm not sure what that number would be, maybe $250,000? It will also depend on my income level, since sales and PM can scale to pretty large income numbers. 

@Cory M. Are you interested in investing in Dayton or do you already have investments here? @Christina Carey runs a pretty great investor friendly brokerage (disclosure: i'm a licensed agent and PM under her). 

If you have any specific questions about the market, I would be happy to give input.