All Forum Posts by: Thang Nguyen

Thanks all. I guess I don't have the right framework to analyze the deals. If I take any low CAP deal in better areas, I see a large negative cash flow out of it. It is ok to get 5% and neutral cash flow but I can't sustain large negative cash flow. Example is below.

Sale price: 3.1M

Expected Mortgage payment: 13.9K/month with 25% down, 6% rate, 15yr ballon with 30yr amortization

Cash to close is 884K (25% down + 1.5 point closing cost); No upfront renovation cost.

Gross yearly rent in 180K

-5% vacancy

Yearly expense is -46.6K

NOI: 124.8K

P&I payment: -167K

Cash flow: -42K/year

This is in Redmond by Miscrosft so one of the best area in Seattle.  No room to increase rent as this is recently renovated and at market rate.  Anyone likes this deal with negative cash flow as advertised?

If the seller drop the price by 800K by some tough negotiation, would anyone do the deal with CAP of 5.4%, NOI = 124K, cash flow of $700/year? I assume this is mainly an appreciation play.

Would love to understand the different ways to evaluate better class properties to make the numbers work.  

Ronald, are your 15% and 21% CAP based on proforma and did it required major rehab like with Bjorn? How did you find these deals?

I have been investing in SFH rentals in the Seattle area and want to move to multi-family apartments ($2-3M value). I am using MLS and Craiglists but not have luck finding anything close to a 10% CAP rate. Does a 10% CAP still exists or am I using the wrong tools to find properties. Thanks for the advice.

Welcome Joe. I am an investor with money to cosmetic SFH flips or acquire apartments. Would love to be added to your DL list. Thanks.