All Forum Posts by: Scott Anderson

Need to look at your insurance policy but i believe most cover lost rent.

Patrick Geers CoStar is notoriously bad in terms of apartment occupancy data is tertiary markets. Also, Baton Rouge is a fairly integrated market, where there are a lot of old developments in Tigerland that are actually closer to campus than new student housing development. Might be skewing your data if you’re not familiar with the Baton Rouge multifamily market.

Based on what you posted rents are ~$2,400 and mortgage is ~$1,700 that leaves $700 for expenses to break even. I doubt that is enough room for taxes insurance property management (would likely be $240 on its own) vacancy, etc. I think the realistic analysis is the one on the second page showing monthly negative cash flow of a few hundred dollars a month which I’d say is a bad deal.

What is the monthly income used in the calculator based on? If that is market rent, this is a (probably) bad deal. If it is current rents and there is significant room to raise rents it could be a good deal. There are a lot of expenses that you aren’t considering it seems like to get to your NOI estimate. I’m not a huge fan of just blindly following the 50% rule but just looking at that in the calculator shows you that this wouldn’t be a good deal (negative cash flow).

This will depend on the bank and ownership structure. For my business/LLC loans anyone with >20% ownership has to be on the mortgage/guarantee the loan.

@John Zhao I'm an appraiser of multi-family but not an agent or property manager. 

Residential or commercial? I’m a fairly new real estate appraiser (<5 years) so if you want to PM me I’d be more than happy to answer any questions you might have.

What kind of property are you looking for? Colby Burk with Keller Williams is a great agent for SFR. The right answers will depend on what exactly you’re looking at though.

I’d probably create an operating “shell” entity that did all my business (just you) and then create individual property entities with investors that are used to own each property.

Started two LLCs (multi-member) that own/will own a total of 10 units in two properties at the end of March (one closed last week and another is under contract) and invested in syndication that owns 50 unit/150 bed student housing development. Just getting started.