All Forum Posts by: Timothy Munger

Yes, this project is in Indianapolis. Rents and occupancy have gone up but not to the point where this recent material crunch has made rents that much more attractive. I haven't gotten the appraisal yet but about too. Let's hope you are correct in this assessment or I am in trouble ha.

I don't agree with the large crash from 08 happening again, that is very unlikely to happen. I think a slow bleed from inflation like the 70s (just not as bad) seems more likely. I studied the 70s and early 80s for exactly this reason. Throughout that time rents were gaining almost 10% per year despite stocks falling due to the security of high bond rates. I agree though that holding paper wealth is the absolutely worst thing to do right now... and I'm trying to avoid it at all costs, hence the risky build I'm trying to pull off. It's near a 8% cap right now which isn't bad for a new build...but 

Well of course on paper those things won't be an issue but I would assume with all new builds the margin is extremely tight.

@Chris Seveney

Thanks yes market study was very positive .7% absorption. Lots of other area building definitely. Issue is rents must go up year over year or this thing won't be very profitable, though I may be able to sell it for a decent profit but i have no desire to do that. I just am confused how everybody else is making these numbers work. My numbers have a 5% rent rate change year over year.

I'm trying to get a small 15 unit building built. When does it make sense to push off a project? Although things are completely nuts I don't see material prices relenting anytime soon, or if they do we will be knee deep in 6+% rates. Anyone pushing off, these bids are absolutely insane and unreasonable in my opinion?

Thanks everybody that's great news. I already have a lender just want to keep the CAP rate up, which a 10% PM fee would reduce it significantly.

Do appraisers automatically include a 10% property management fee despite it being managed by owner or if its possible to secure a lower say 7% management fee? If they do that can result in a drastically lower appraisal due to CAP rate adjustment...anybody with experience with this? Thanks!

Hello I'm building a small 15 unit market rates apartments. There are some market rate nearby but there are quite a few of new affordable housing. There is also many high end new single family homes nearby as well. I am concerned that mostly affordable apartments are in the area. I know they are needed but am worried that this gives the neighborhood still a "developing" area vibe and will bring more crime around my market rate apartments. Anyone encountered this?

If you have a shovel ready property to possibly sell or to value on a pro forma for a bank. How do you value it? Is this approach logical?

Using established value of made up property from a CAP rate of 6% say $1 million dollars.
If hard costs are $500k and soft costs are $100k
$1 million minus $500k minus $100k would give us a property worth of $400k. Would that be a fair assessment? Thanks

This is from marion County Oregon not Indiana