All Forum Posts by: Treivor Cashion

@Jay Helms always great to hear your input man! Once I'm done with this model, I'll be hitting you up to see if my deal analysis is accurate. The goal here is to familiarize myself with the different financial metrics in real estate investing, how they're calculated and to build a model to my own specifications to get the numbers that I want to see when it comes to rental real estate pro formas. With my own model, instead of downloading one from the internet, I'm able to accomodate it more easily to my own wants and needs as well as give myself a little credibility when it comes to analyzing deals if I want to present them to mentors, potential investors, and family and friends that might be interested in contributing investment capital. I'll know exactly how the model works and how it's integrated together, as opposed to just saying "oh, I downloaded this model from the internet and it looked good"...doesn't sound like I was being proactive or vigilant with my REI education if that's my answer to someone asking about my models lol

You're right in the sense that I don't want to have analysis paralysis. That's always in the back of my head, but right now I'm purely in the education phase of my REI strategy and this is one of the best (and fun) ways for me to learn about how the numbers work together in a real estate investment to give us an overall picture of if it would be a lucrative investment or not based on our predetermined criteria. Do you think I'm doing too much at the moment, in terms of analysis? Don't get me wrong, I've gone to quite a few investor meetings over the past couple weeks when I can...so I'm not ignoring the building relationships part as I'm building this model by any means! But I do feel like it's important to have a very solid understanding of the numbers

@Account Closed excellent points! I'm planning  on adding those types of analysis to my models at some point along the line! But you're right, it's kind of out of the scope of my current goals when it comes to this model. I'll be taking your suggestions into consideration as I move farther along with it though, for sure! Instead of a more financial metric, you would also want to see more of a demographic/geographic analysis as well, which is also a huge aspect to real estate investing!

Looking forward to meeting all of y'all! Do we have any idea where this is going to be located at for next weekend?

@Tyler Kastelberg that makes sense! I'm looking up a bunch of youtube videos on how to do calculations involving NPV and IRR matrices as well...and starting to realize how little I know about this business right now haha

@Eric James I'm primarily looking for small multi-family properties (2-4 units). I know some of the information in my model is probably more than I need and possibly excessive, but I want to build a model that will take into account all factors for my long-term goals. I eventually want to invest in large apartment complexes, which will require this type of in-depth analysis. I also just think its good for my own knowledge as a beginning real estate investor to know how the numbers work for a bunch of different types of metrics, how they interact with each other, why they're important and what they can tell me about a property quickly. 

@Tyler Kastelberg is there a difference between unlevered yield and cash on cash return? and would we just use the projected annual cash flows as our values for unlevered IRR? Or is there something else I should consider with that calculation?

Also, whenever we've calculated our IRR, what do we generally want to compare it to, to give us some idea of whether we want to accept a real estate project and what our margins will be? Would we compare it to other real estate projects in our pipeline and the one with the highest IRR that also fits the rest of our criteria is the one we should accept? Just trying to grasp the concept of IRR in terms of real estate deals....thanks!

I'm seeing a common trend here haha thanks for the input guys! I'll make sure to keep it in mind. 

Hey guys and gals, 

So over the past few days I've decided to put my finance and business background to good use and build a financial model from scratch, using a few ideas and pictures I've seen around the internet and on BP. My goal is to be able to put in a few numbers (purchase price, improvements, closing costs, financing info, revenue assumptions and op ex) and essentially get a full analysis on if a property is worth investing in based on the criteria I've set out for myself. Right now, my model shows this information automatically once the necessary information is entered: 

LTV, Cost/PSF, Cap Rate, GRM, CoCR, ROI, DSCR, projected revenues, expenses, and the resulting Gross Rental Income, Op Ex, NOI, Annual CF, Equity Capture, Appreciate and Total Return in dollar amounts over an 10 year model and adjusting for inflation.

I also have a DSCR/COCR/ROI Sensitivty analysis page, an amortization schedule accurate up to 30 years and a criteria worksheet page that I plan to coordinate with the primary page to show conditional formatting with the resulting numbers to visually tell me what metrics work with my criteria and which ones do not.

I also have a page that will allow for pictures of the property, the property address, type and size. 

I'm in the process of adding graphs and other aesthetics to make the package look a little more appealing to the eye. In terms of presenting this type of information to equity partners, lenders or just to my friends and family to show them the potential power of real estate, what do you guys suggest I include in this aesthetic portion? And also, if I missed anything with my technical analysis, I would love to hear about that as well :) currently, I plan on adding a graph to show projected COCR per year, a pie chart correlating to operating expenses and also a rolling ROI.

Sorry that this was lengthy, but I wanted to be thorough! Thanks for any help, insight or advice you can give me. Cheers!

Hey guys and gals of BP,

Just a little question I was thinking about asking earlier today while I was at work...as a more seasoned and experienced investor now, what kind of questions would you have asked as a beginner knowing what you know now? I am just starting out my real estate investing journey and have been reading a ton of books and also starting to draft a real estate business plan...and I can never seem to narrow down which questions are the most important and which ones you can kind of just figure out as you invest...any insights? Thanks in advance!

@Chris Quinn I will most certainly do that, thanks!

@Bart H. I was actually just looking at some duplexes around Skillman, as I'm dogsitting for a friend while they're away on a trip. Haven't started running any numbers yet, but based off what I saw, you hit the nail on the head. Pretty beaten up and rough duplexes for the most part, some look like they required some major work and most of them were at least $200k+. I'm glad to hear your experience with house hacking, as I've had that exact discussion with my girlfriend (I plan on proposing sometime soon), and she's sold on the idea of house hacking and essentially living for free. I also like all the different financing options that are available to you once you claim it will be owner occupied, makes it a lot easier to get in to initially and you get some up close and personal landlording experience. Thank you for the great insight!

Wow, thanks all for all the feedback...I'm constantly amazed by how quickly and thoroughly my questions get answered on here! I come back after work every day and just soak it all in lol

@Vic Reddy starting out, I want to self-manage and as I start to expand and systematize my business, I would look to use PMs. But I think that it would help me as a beginning investor to self manage my own portfolio when it's small to get to know the ins and outs of the RE business through getting engaged in every way possible. Thanks for the insight!

@Fred Heller yeah, I kind of like the whole idea of "landlording on training wheels" since I'll be right there with the tenants for my first property and kind of get to experience investing right there in the thick of it. You're also spot on with the crazy Dallas prices...just saw some SFRs listed in the $1.5M range, they've gone up a ton over the recent months. 

@Jay Helms my main goal is to buy and hold small multi-family / SFR investment properties for the purpose of long term cash flow with the intention of 1031 exchanging these properties (or selling them) later on to upgrade to larger apartment complexes. I want to cash flow $5,000 / month by the time I turn 30 years old and, from what I've researched and read, small multi-family properties provide the greatest opportunity to do so as they don't strictly rely on one tenant for the property to be profitable. I intend to do this either in the DFW market or College Station market, as I'm most familiar with these and I think they both have lucrative markets for the asset class I want to enter. As mentioned above, I want to self-manage my own portfolio while I'm small when I start out to gain a more in-depth understanding and insight in to the business, so property managers aren't really what I'm going for currently. I'm actually going Driving For Dollars this weekend and I'll be searching for deals through sites like realtor.com and through some real estate agents I'm connected with, just to start out. I'm building capital right now, along with my education and network, and I intend to have my first property by the end of 2018. Once I find a couple to look at, I would love some insight on how you analyze deals if you have the time!

@Michael Guzik thank you so much for that response, congrats on your success in the multi-family market with those 300 duplexes! Hope to get there someday...I don't think he was being negative, I think he was just trying to give me some balanced insight into that type of real estate asset class and some of the issues I should think about early on. But I do believe in what you said, taking a grain of salt with everything, but I also believe in trying to get a realistic view of the pros and cons of any large investment I might undertake. As someone that has managed such a large portfolio, what kind of stuff would you suggest I look out for when dealing with tenants? What do you contribute your success in managing that many properties to? 

Thank you all for the help and advice, I look forward to learning more!

I bump this so hard haha I'm all about this, so glad I stumbled across this thread. Would love to start getting connected with like-minded people around here in the DFW area, please let me know when this happens! I'm 22 and just starting my FI / REI investing journey, just learning and networking, but have been searching hard for a group exactly like this. I'd find a way to get there!