All Forum Posts by: Account Closed

@Elisha Salgado No money down is extremely rare and it is very dangerous for beginners as well given your LTV is so high. You may end up running out of money.

Even there is no money down, you will need some reserve to pay for closing cost, loan origination fees, may be some deferred repairs and so on. 

My suggestion would be go with FHA 5% down and house hack, learn the business. That's how I started and I now have 28 units.

@Gordon Forbes This is where diversification comes into play and your goal. Yes, you are absolutely correct that market is all time high, real estate is over heated, commodities are going down the hill. 

You would actually have to determine what is your goal of investing, your investment horizons and liquidity needs. As for long term investors (over 15 years investment horizons), if you do equal contribution, stocks will beat bonds and commodity by at least 3-5%. 

Real estate comes into play when you need diversification. 

I am 26 years old and working in financial industry and I do not have liquidity issue. I have 6 months personal expense saved in my checking account. My investment horizon is more than 30 years. Personally, I go for 50/30/10/5 low cost ETFs/real estate/individual company/cash. 

@Mindy Bowden I have about 10 HVACs that are running perfectly fined with regular 6 months tuning and they all are about 18 years old. 

I think unless it is necessary, you would be okay for this year.

Hello everyone, 

I am closing on a 28 units building and half of the panels are old and rusted. I will need to fix and upgrade all of them. 

As far as I can tell, they are quite expensive. Could anyone refer me to a reliable and reasonably priced electrician?

@Preston L'Ecuyer

Since this is the SF built in 81, you will definitely need to set aside more than $1200 per year for Cap Ex. 

I always look at DCR of above 1.25 before even looking into COC or Cap rate. Unless you can do a land play, this deal may not be right. My rule of thumb is at least 10% on COC. I am also a bit worried about vacancy with SF where if you only get 1 month out of the year vacant, that's 8.3% vacancy.

Please be sure to take into account of Rehab cost in down payment when you calculate COC.

If you are starting out, I would strongly recommend hose hacking with FHA. Since the down payment is very low, you will be able to get positive cash flow on FHA property with much lower down payment.

@Josh Huber

For MFs above 5 units, there are numerous studies done that cap rates are not directly proportional to the fed rates. You would also have to look other point of view where Hong Kong, Japan and other Asian markets are having negative cash flow. Most foreign investors are buying up properties above 1m deals which push the price up higher. 

Fed can only change the short term curve of the rate where 10Y treasury which correlated to mortgage is determined by market. As you can see, most EU and Japan has lower yield on their treasury notes which pushes US 10Y notes down as well. 

Please let me know if you disagree with me. 

@Jeremiah Dye 

In short, dress code really matters. 

I work in a finance industry managing money for very successful people. In our company, we used to have to take two types of profile pictures for client facing. One with a smile when the market is doing good and one with sad face where market is doing bad. This is about your facial expression. We do have to dress to impress our clients or even potential investors. 

@Omar Khan Thank you very much for explanation. The property is on Montrose area. 

Hi all, 

@Juan Vargas @Omar Khan @Michael Dang

I have the same dilemma with closing on one of my deals. The deal current access tax value is 1.4m but I am purchasing way higher value than that. 

As being non-disclosure state and seller financing (no loan info was on public), in your experiences, would that value could jump next year?

I would not say deals are not there. You just have to look closer and more time consuming. 

I found out hard way that you are definitely going to overbids on deals under 500k around Houston where the sellers have about 15 bids in a matter of days. 

Rental market is still strong in my area (montrose) I have 96% occupancy. Some of my tenants are replaced post Harvey. Most Harvey people are still rebuilding their home and having a hard time getting their SBA loans approved.