All Forum Posts by: Tyler Kastelberg

@Rich Rodman

Rich: Thought I'd chime in with a quick note about tenant risk ...

On small properties (under 80+ units), tenant-specific risk can be substantial in an economic retraction. If vacancy or delinquency by a couple tenants will dramatically impact your returns, you're exposed. On larger assets (80+ units), you'll be much less exposed to tenant risk and your main downside risk will be a decrease in rental revenue or vacancy (if you refuse to decrease rents). Run some sensitivity analysis before you invest passively or buy a property to better gauge where you'll land in a pull-back.

@Brayden Stevens

Brayden: Don't let your economics professor encourage you to attempt timing the market. 99% of the time you'll loose. Keep a long term perspective, and you'll be able to ride all the bumps.

@Ori Skloot

Ori: Great to see a fellow bay area investor finding deals! Would like to buy you a coffee sometime - will DM.

@Preston Quinn

Preston: My firm invests in both Richmond and Tidewater/Norfolk. Richmond is one of the strongest markets in the state, driven by VCU's expansion over the past 10 years and a trickle of new employers. A few pros and cons:

Pros: Great management companies, stable employment, strong occupancy

Cons: Valuations are very high, lots of supply coming to the market in Manchester/Scott's Addition areas

Hampton Roads/Norfolk is a good market but is very neighborhood dependent. Asset valuations are lower than Richmond, but you'll struggle to find a competent offsite property manager (for less than 80 units). 

Pros: Higher cash on cash returns possible, relatively low barrier to entry with sales around $50k-$60k/door for stabilized product

Cons: Very difficult to find a good manager, mostly Class C assets, lower occupancy than other parts of the state

Best of luck to you!

@Luan Vu

Luan: Thanks for the link! 

@Lisa Jones

Lisa: Interesting deal! I invest in Hampton Roads and can tell you my number one problem has been finding a competent property manager. Can you give us the address or neighborhood? I'm happy to give my 2 cents. Feel free to DM me if you don't feel comfortable broadcasting the location information. 

@Todd Dexheimer

Todd: Two questions ...

1) The PTACs that I've seen look to be quite intrusive ... with half of the module sticking out of the wall. Are there less intrusive PTACs?

2) I've never heard of wet bulbs. My quick google search didn't help. Can you link me to information?

@Jeff Kehl @Todd Dexheimer

Jeff and Todd: Have either of you had success reducing heating costs using a boiler timer that limits the boiler run-time to 13-14 hours/day? 

I considered running gas lines along the exterior of the building and installing wall furnaces, but I was advised that gas lines are very expensive to install and require permits. 

BP Community!

I own an 8-unit, class C multifamily building in coastal Virginia and am looking for a heating alternative that will allow me to decommission the central boiler. The units are currently separately metered for electric, and 7 of 8 units have separately metered gas lines for their stove-top. Keep in mind that ceilings are high and most of the floors are hardwood. I'd like the new heating system to satisfy the following:

1) Minimally invasive: I'd rather not tear out the old plaster to run new gas, water, electric, or ducts throughout the building

2) Cost effective: I'm working with a budget and need to make sure whatever is chosen won't break the bank

3) Transfer the cost: The new solution must pass heating costs to the tenant ... electric preferred

4) Energy efficient: Tenants won't want to renew their lease if their electric bill skyrockets

5) Effective: The winter months can be chilly in Virginia, and the system needs to be able to heat the rooms effectively

Thanks for your input!

@Chase Maher

Chase: Great to e-meet! I'm an active investor in Norfolk and am very familiar with the market.

I'd be very cautious entering into a "break even" investment. Norfolk class C assets can have maintenance costs that dramatically vary year to year. You'll need a large reserve fund to absorb unforseen costs.

You'd be better to buy the deal using bank debt -- I'm happy to introduce you to my contact at TowneBank.

I'd argue market cap rates are closer to 7.5%. Have you modeled the purchase and exit?