All Forum Posts by: Scott Ryne

@Chris Puckett Just curious. Where did you get the stat on population growth in Kannapolis?

@Alex Franks

I believe that there should be a copy in the foreclosure file at the courthouse. 

@Chris Hill Will do.

@Stephen Murray I agree that the expenses seem a little low. The first questions that come to mind are 1) Is there any deferred maintenance? 2) Why is the rent only $350/unit? 3) How much do you have to spend on improvements (if any) to get market rent? 4) Owner financing?

With that said, it appears on the surface that it would be a deal worth putting a little time into. If it turns out to be a deal, I would suggest you do it with private money and refi out later. At that price point it should be no problem getting private money.

Not trying to horn in at all, but if you would like to talk about it, give me a call. I would be happy to share what little bit I know.

One more thought... Cap Rate does not typically set the market value of SFR, but it does set the value to me. Commercial properties are valued by cap rate.

@Account Closed

Sometimes I do not explain things clearly, but let me give a shot.

Let me start by saying, this is an example of why I personally (personal opinion here), do not like using the term "Cap Rate" when it comes to SFR. It is a term used to value multi-family and commercial real estate. If someone does not fully understand what the cap rate is and how it's used, it may be confusing. @Curtis Waters is not confused. He is correct. The cap rate is the return. It is another term for the Cash on Cash ROI on an all cash deal.

The $12,000 NOI is not the return, it is the cash flow produced by the asset before debt service. The ROI, or Cap Rate, is determined by the amount of the investment. Therefore the Cap Rate is the return.

This is what the example above tells me. If I set my buying criteria to only buy properties that give me a 9% COC return or better, I can only pay $133,000 for that property. If I can't, then I move on.

Finally Bob, If 4% is a good return in your area, you should let me find you something in Charlotte. I can get you good solid rentals at 6%+ all day long!

@Chris Hill I have two houses and two lots I hope to have under contract soon. I have lived here in Kannapolis for eight years and wholesaling for two.

Some if not most might disagree with me, but my opinion is that there is a strong upside to that area. It may take 5-6 years, but I feel it's there. The city of Kannapolis has made a huge investment in the downtown with big plans coming in the next couple of years. I saw Dave Lindahl in Boston a year ago and he mentioned Kannapolis as an emerging market back then. He did not know where I was from  when he made the comment and that was long before the city  mentioned publicly what they have planned. I am no expert, so take it for what it's worth @Chase Speights.

@Chase Speights 800-1100sf Mill houses, 3 bed $800-$900, 2 bed $600-$700. Newer 3/2 $1000-$1100. Almost all the Mill houses have one bath.