All Forum Posts by: Steven Anderson

Have you considered a tenancy in common?

Steve McCondichie why do you include tax depreciation in your ROI calculation?

Raj and Rich- I'm new to BP so can't say I know how to initiate PMs. Others have successfully reached out to me and a conversation started that way. Anyway, I'm in the Woodlands and hoping to invest in this area so if you can PM we can connect and hopefully network.

I prefer 30 year notes, allow cash to build up and pay down with excess cash. It's more conservative and while my rate may be higher and I will pay a little extra in interest over time I can still accelerate my payoff. And if I need the cash cushion bc of vacancy, market downturn, surprise repairs then I always have it. One thing to be careful of thing is that some lenders require a minimum amount for any principal prepayment, in order to re-amortize your loan and adjust the P&I payments downward to reflect your principal prepayment.

Rent is due the 1st.  If not paid by the 7th we charge $85, then $10 per day thereafter.

I, and three other partners, will be constructing and holding for rent a new duplex. We primarily focused on doing so in a LLC structure. Given the financing limitations of LLCs I was wondering if anyone has any experience structuring similar group RE investments through just a general partnership agreement wherein the same concepts and issues would be outlined as in a LLC agreement, but the properties are owned by the individuals as tenants in common? Legal liability issues aside, which I know the merits of LLCs, GL policies, liability, etc. have been debated in detail, does this arrangement give any additional flexibility to tap the conventional lending markets and not be limited to the commercial lending markets? Any other issues/concerns you would have with this arrangement/structure?

I appreciate the feedback and advice.

Steven

For Texas investors, I'm interested to hear... 1. your preferred investment metrics AND 2.the minimum requirements for each ...when analyzing SFH for long-term buy-and-hold. I'm particularly interested to hear from those in Houston. GRM? COC ROI? IRR? Cap Rate?

You originally asked about tracking metrics. I use a 10 yr model to project my investment analysis before purchase. When I purchase I set this as my final estimate. I use the same model at the end of each year of ownership and override the estimates with actuals and I can then see the actual metrics for that year. I continue to forecast my expected returns in the same model (making adjustments for future expectations as needed) so I can see my revised 10yr metrics which now include my actual figures for years I've owned the property and revised forecasted figures for future years.

I and a small group of investors (in a traditional LLC or series LLC) plan to construct a duplex at $.90/sq ft. Post-construction we expect FMV to be $1.20/sq ft. We will capitalize the LLC with the requisite 20% equity for the construction loan. Based on our estimates above we expect to have 75% LTV when we close on the permanent long term financing. My question is, will we be able to cash out and distribute the original cash contributed (as equity for the construction loan) and redeploy on janother construction project? If so, will a six month seasoning period apply? What alternate sources of funds/financing would you suggest for the construction financing in order to allow the immediate cash out when closing out the construction loan to permanent financing?

I'm targeting the spring/the woodlands area and Bastrop Texas as well.