All Forum Posts by: Thomas Moran

@Breanna Collins My biggest regret is not starting sooner. Having time on your side is your most valuable asset. That being said, don't deprive yourself of your early 20's. Date the guy/girl, go to the party, travel, just be young. If you can buy 1 or 2 houses simultaneously, DO IT.  

@Angelo Palazzo not in my limited experience (knock on wood). It's a fear of mine though; i've seen videos of landlords walking their property after the fact where tenants threw buckets of paints on their hardwood floors, smashed windows etc. Probably doesn't happen very often but if I can do anything to mitigate the risk of this happening I will.

@Billy Cha I'm on my third rental and I will tell you that I was in a similar boat on my first one. The one I just bought in November also had a tenant in place. In both cases the rental increase to market value would have been so enormous that I was worried it would tick them off, causing them to "seek revenge" on my property. In both cases I didn't evict, just simply told them I would not be renewing their lease because the house was due for renovation. This was also true and despite being a little disgruntled, the properties were unharmed. Now that's a VERY small sample size, and maybe the other way works in some situations, but i've found this to be pretty effective and conflict-free. 

@Andrew Carlson Thanks for the encouragement man. Let's definitely share war stories...and awesome job for going big (relatively) on your first deal!

@Danny Randazzo We did! sent the LOI and got it accepted this morning! actuals are 626k acquisition... current gross income is $64,000 but it is wildly under market rent. had a friend of mine whos a consultant for this kind of thing do some analysis and it's looking like gross could be brought up to about $88,800. Expenses are $32,658 (actuals).

Uncharted territory for me...scary/exciting stuff!

@Ehsan Haque awesome just PMed you 

@Ryan Daigle thanks for that Ryan. A business partner and friend of mine saw this thread and said he knows you (or of you). Small world. Just PMed you, let’s connect 

@Arthur Schwartz thanks that’s definitely a concern. Based on that link it looks like it is in a moderate/high risk area. Only 64 ft above sea level. That being said from what I know it’s really only the Tar River flood plain you have to worry about. I’ll do some more research though thank you!!! 

@Jon Satchwell yes I can attest. Spent the last 20 years in Raleigh. Raleigh is having quite a renaissance with the talent pool and RTP fueling much of that. Always see cranes in the sky. I'm sure some of that value spills over into tertiary markets. Thanks for the input! 

Thats super helpful @Mark H. Porter, thanks. So what you're saying is kind of the opposite of what Erik is saying, which is you CAN in fact use CAP rate as a high level indicator for a deal even if it's a small(ish) multifamily like a 12 unit? The CAP rate for this would be much higher than the area - 7%. I have the tax return statements of all expenses on the property though from the owner to figure out debt service and other things that could kill the deal and the cash flow still exceeds $200 a door a bit.

I'm using Michael Blank's LOI calculator and theres a 10-minute offer tab that has a default of 50% expenses that he recommends not to change.Would you seasoned multi family investors echo that? 50% of NOI goes to expenses?

@Jon Satchwell

@Erik W. Thanks for the wisdom nuggets. I'm sure there's not a hard and fast rule, but what's the broad threshold at which you start to value apartments off cap rate, NOI etc. vs. comparables? (40 units? 100 units?)

Thanks @Bjorn Ahlblad that gives me some confidence. 

@Jon Satchwell Appreciate that man. How do you see the Greenville/Eastern NC  markets positioned for the future w/ COVID?

@John Thedford sent 

Thanks @Erik W. Super helpful. So in summary I should look at this deal the same way I would analyze and negotiate a 4plex? 

Also thanks @David Brent it very well could be a D area. I am going to drive it this week because right now all I i've done is just doing a desktop eval. 

Another thing is... the CoC is assuming we could buy it in the mid 6's and raise rents to market value while keeping expenses the same or lowering. Obviously a lot of variables here, and even if it worked it could take months or years

Really helpful though. Thanks.