Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Sergio Altomare

Sergio Altomare has started 25 posts and replied 129 times.

Post: Self Storage Syndicators/Operstors

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60
Originally posted by @Kevin Bledsoe:

@Sam Silverman I would touch base with @Sergio Altomare at Hearthfire Holdings. Sergio and his team are building a large fund right now with numerous properties under contract to close in the next 120 days. It could be a good opportunity to learn more about the industry, and Sergio and his team are extremely knowledgeable.

Thanks Kevin! Sam, we just launched a fund and have 10 properties under contract between Indiana and North Carolina. We have a tremendous acquisition and underwriting team and are confident that our deals are some of the best out there.

Please send me a message if you want to learn more and I can give you a landing page with complete details.

Kevin is a titan in the industry, so his mention of us is the highest compliment we can receive. :-)

Thabks

Post: Any experience with reputable self storage syndicators?

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

@Kevin Bledsoe thanks. @Matthew Turcotte I'd love to share our approach and strategies for value add self storage. Shoot me an email if you'd like to chat. Thanks

Post: Made an offer on Duplex..What do you think

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

@John Erlanger although not the greatest metric for a small MF, but a class C property in most markets should trade in the 7's. He mentioned cash flow and price, so easy to calculate.

Post: Made an offer on Duplex..What do you think

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

@Jeremy G. Not enough info, but the cash flow says you're buying at cap rate in the 5's, which is a class A-B rate. Gross rents suggest it's a fair price, but need all the numbers to be sure the analysis is thorough.

Post: Webinar - 9/1/20 -Investing in Real Estate with your 401k/IRA/TSP

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

Join me and Qualified Retirement Plan (QRP) expert Damion Lupo on September 1st @ 7PM EST to hear the best strategies to tap into your retirement accounts to invest in real estate. All done without penalty and deferring taxes.

Register here >>> https://hfire.co/register-eqrp

Post: BP post got me fired!

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

Well, remember the objective in RE...to FIRE your boss and the W2 world. Keep doing what you are doing and flush the W2 toilet!

Post: TODAY @ 4PM EST - Webinar - Corona Crash Recovery

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60

It’s no secret that the global market is in meltdown mode. Businesses are already laying off workers and starting to file for bankruptcy. Many people will lose their businesses, their jobs, their house, their cars, their retirement funds.

It’s ugly and only going to get worse!

Shutting down the world economy is unprecedented. The fallout is going to be tremendous, but if you are receiving this invitation then there is good chance that you will come out fine.

In fact, if you have the right plan in place there is a great chance that you come out stronger and even better off financially than you were several weeks ago.

As I spend hours a day scouring the news and markets to piece together what is happening and what I am prepared for, I feel that it is my duty to take this time to remove emotions from the situation and see the sunlight coming when the storm is over.

That’s what this webinar is for, to have a candid discussion on where things are and how to be prepared to come out stronger.

Save My Seat

It’s no secret that I have been forecasting a market downturn and recession since late 2018, so our company has been preparing for this for well over a year now. The only question was what was going to be the trigger. A health crisis was not expected, but it’s not the first time a black swan event was the cause of a crash.

Over this period, we have done a lot more selling than buying. We have not been able to make 99% of the deals we see make sense. We’ve told anyone listening that the market crash is coming.

Unfortunately, IT’S HERE!

In a conversation with a wealth manager as recent as last week who presented their forecast of this being a minor blip in the market based on his analysis, I suggested that stopping business even for several days would crash the market and bring us into a recession. His response was to walk away from me.

Well look at where things are at now!

AND NOW FOR THE SUNLIGHT TO LOOK FORWARD TO…


As Warren Buffet once said “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Well the time to be greedy is coming.

Now is the time to be prepared to pounce on opportunities to jump back in when the markets bottom.

Now is the time to evaluate your capital sources and position it properly.

Now is the time to have a personal playbook to do what the wealthy are waiting to do.

Join me next week on March 26th for a webinar on how to develop that playbook.

Here’s what you will learn:

How fear and uncertainty are impacting the market and what to expect going forward

Why not knowing the end game is less important than being prepared for anything

What are some good strategies for hunkering down while the storm continues to grow

How to take inventory of the sources of capital you have to invest and how to get access

What are the key considerations for positioning this capital

What the wealthy are doing right now to prepare for the recovery

What we are thinking and doing as a company

Date & Time
Thursday, March 26, 2020
4:00 PM – 5:00 PM EST

Post: Cap rates make no sense

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60
Originally posted by @Immanuel Sibero:

@Sylvia B.

That's very perceptive of you. Yes you are correct about the statement "The market dictates the cap rate, and the cap rate is based on the NOI." not making sense because it doesn't. That statement is comprised of two paragraphs that contradict one another.

The formulas you quoted from the article:

  • NOI / Cap Rate = Property Value
  • Property Value x Cap Rate = NOI
  • NOI / Property Value = Cap Rate

need further explanations. As they are written, those formulas are logically circular (i.e. Value depends on cap rate and cap rate somehow depends on value also. It's like watching a dog chase its own tail)

There are two types of cap rates - the "property" cap rate and the "market" cap rate. The "property" cap rate is calculated by taking the NOI divided by the value(usually cost) of the property in question. So this type of cap rate differs from property to property. The "market" cap rate is NOT calculated, it is determined by the market (as the name suggests). This is the cap rate that you obtain from the market participants i.e. commercial brokers, lenders, investors, etc. This cap rate is really a measure of investors sentiment towards the local real estate when it comes to their expectations, outlook, etc. In other words, it's a measure of how desirable the investors think the properties are in a specific market. For example, the more investors like the economic prospects of a particular market the more they are willing to pay and the lower the "market" cap rate goes. THIS cap rate is the cap rate that should be used when it comes to valuing a property NOT the "property" cap rate that the article seems to suggest.

This "market" cap rate SHOULD be the one that is referred to in the formulas above, so I can rewrite them as follows:

  • NOI / market Cap Rate = Property Value
  • Property Value x market Cap Rate = NOI
  • NOI / Property Value = market Cap Rate

Note: again in the above formulas, "market" cap rate is determined by the market, it's NOT calculated as the article implicitly suggests. Since cap rate is GIVEN, you can see the formulas above are no longer circular. I don't know how many "cap rate" articles, blogs that simply miss this concept to the point that I question the authors' understanding.

Cheers... Immanuel

Great discussion. Clarifying the part in question and apologizing for it not being clear, but the formulas are mutually exclusive and intended to show how a cap rate is used whether buying or selling, not in sequence.

The example of the cap rate not changing is for easier math and not intended to suggest that it would not change, although there are reasons why this could be the case.

As a syndicator of value-add properties, the objective is to buy at a better than market cap rate (i.e. higher), add the value, and then sell at a compressed cap. In the example, the $5k added was the forced appreciation, but with an expected sale price using the same market cap rate for easier math and to stay on point with the objective of recognizing the true cap rate of a property against the maket cap. Hence the increased value.  

If you get the point of knowing the TRUE value of what you are buying and know how to position a property for sale then you get the objective of the article. 

Thanks for the feedback!

Post: Local Philadelphia Lenders

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60
Originally posted by @Junon Celestin:

@Sergio A. Would be able to connect me with some good lender to help finance two properties. I inherited one and purchased a home that need remodeling and repairs.

Hi Junon. Sure, I can make a connection. Shoot me an email with details and I can see who might be a good fit. Check my profile.  

Post: Duplex under contact but pitbulls next door. Should I be worried

Sergio Altomare
Pro Member
Posted
  • Rental Property Investor
  • Greater Philadelphia
  • Posts 135
  • Votes 60
Originally posted by @Jay Hinrichs:
Originally posted by @Sergio Altomare:

@Mitchlyn D. Don't just walk, run! Unless you can find a way to address the long term issue by determining something illegal is going on or they are renters, then there really isn't anything you can do. We have a triplex next to cat hoarder to where the smell came through the walls. We spent countless hours try to call animal control and every other resource we could come up with to no avail. We ended up having to constantly use measures to keep the smell down in our building. 3 years of this and the lady passed away and the place is now being gutted.

We also had another property with a neighbor dog that was always barking and nasty that played a role in losing 2 tenants.

Good luck

I did a hoarder house 2 years ago..  18 dead casts in side and about 15 living.. the place was un beleivable filth garbage .. when we did lead and asbestos remediation the guys had to use full on bunny suites and resperators  like it was an anthrax situation  LOL

Eesh, glad it wasn't you!