All Forum Posts by: Tyler Hallman

Hey everyone!

Need some experienced help here... I've found an off-market distressed 88 unit storage facility in a town where every other facility is at max capacity. I'm in talks with the owner and she and her husband are just getting older and don't want to deal with it anymore. There is TONS of room for value add.

Last years NOI was $8360... 60% occupancy, no website, no signage, no advertising. They own it outright and have expressed interest in seller carry.. for how much i'm unsure.

She said she wants $350k for it. If you use cap rate valuation and give it a heafty 10 CAP (lender i spoke with said in this area for storage, a new facility is an 8 cap and this one needs work) 8360/.10 = $83600

My questions are:
1) Am I valuing it correctly? should i be taking into consideration the assessors value of the land and buildings on top of that number or is it just cap rate based for value? I'd like to see how some other people value it.
2) Can i have seller carry 20% down payment and have a bank loan 80%? one bank i've spoke to said they require i put at least 10% of my own money in it and that goes against everything biggerpockets preaches of "opm"
3) For seller carry what are normal terms? (interest rate, months of repayment, etc)
4) Could they seller carry the whole thing with a ballon payment in 4 years? If I did that and refinanced it once updated and filled I should have PLENTY to repay them off. My problem with banks is I am self employed and they don't like to lend money to self employed people.. but once this is filled and worth the money do they even take my self income into consideration?

Thank you!

@Ki Lee I'd be interested in seeing that market analysis and why you chose it. Sent a DM

Hi Henry,

Very fun reading through all of this. I'm originally from Iowa so its fun to see someone doing commercial work there. My wife's parents also just finished a 200 unit construction build in Grand Junction, Colorado. I've been doing the marketing for them and we are at 70% occupancy after year 1. I want to leverage their equity to expand, but they put their blood sweat and tears into the build and they don't want to do anymore.

@Julie McCoy thats awesome! Can you share how you did it?

@Brandon Johnson

Thanks for the insight. Can you elaborate? If the craziness is about to intensify wouldn't you want to lock up properties before they go even higher and secure your cash?

Hi all,

My wife and i are moving to Baton Rouge in a few months. It seems like rental prices are great for the area, but I see a lot of flips selling for less than 200k.. with the price of material right now these have to be acquired for next to nothing to make a profit. Does anyone know or recommend fix and flip in the area or just brrrr them?

Thanks!

Thanks for all the info from everyone that’s very helpful! I guess when I think of debt services and expenses the mortgage on the loan (to me) should be a part of that but it doesn’t appear that’s the case? 

I am new to running commercial deals and when looking at cap rates and NOI the numbers don't quite make sense.

Example: 

Asking price - $1.175m

Cap - 6.36%

NOI - $74,000

Its a 5 unit in Denver, Colorado. I can see how their NOI is $74,000 if they bought this 20 years ago for 500k and their monthly payment for the entire complex payment is around $2500 per month but now they are making $1800 per unit per month. So for example as the purchaser (me) my new monthly payment for that entire unity is say $5000 per month. That very roughly makes the NOI 48k dropping the value by a lot. Am I doing these calculations right or thinking of this the right way? It seems pointless to advertise the cap as it sits because at the new purchase price that will change the NOI drastically and in doing so changing the cap rate. Thank you for all your help!

Hey Bridger,

First off, I've been in Missoula for 4 weeks on a job and holy cow every single house in town needs a flip but is worth 300k old and junky! Insane. As far as your deal, sounds pretty good considering thats a duplex. I have a feeling your monthly mortgage for the 2 of them will be more than 1800 considering you'll have PMI with that VA home loan. If there is room to reno and fix it up to add value then you may be in the green. I wouldn't bank on appreciation alone especially due to duplexes not appreciating as fast as SFH and generally thats bad to do anyway. OR if its actually worth 400k+ and you're getting a deal then id say you're in the green as well. Depends. Good job finding something in this insane market I don't even understand.

Hey everyone!

My name is Tyler and my wife and I will be moving to Baton Rouge in July 2021. We own 1 rental in western Colorado right now and I will be looking to make connections with investors and others once we get to LA. My wife is going to graduate school at FranU for Nurse Anesthesia and I currently own a small marketing business in the powersports niche. I have a degree in Industrial Design that i realized couldn't take me to where I wanted to go and have since really fell in love with real estate.

I really like the airbnb model and would like to design a flatpack pre-fab home so that anyone with a little land could start an air bnb. 

Also any input on the current market would be great. I am thinking of getting my inspector license to help with my own investing as well as start another business. If the market is busy busy busy that would be great insight into helping me with that decision.

Thanks!