All Forum Posts by: Rikard Lorén

Yeah I know, but when I say, "if the numbers are correct" then I have in my mind went there and varified it ( if we play with the though ) :)

*Edit* OR:

If someone just could explain for me how the numbers work when u are trying 2 figure out the value of a building and what it does mean if u get higher numbers than the asking price or lower, cashflow and so, would be GREAT, this was the last edit, sry for confusion, thanks!

*Edit*/another question:

So, I was checking with the numbers and came up with that the price: 4 432 098

with a cap rate of 8.1% ( this means that if the correct cap rate was 8.1 instead of 6% )but what does that mean ? woulden't the building be more worth if the cap rate is higher ? I mean: what does this 8.1-6=2.1% mean ? if the building is growing in value 2.1% more, woulden't it be more worth ? or is it cuz of the cashflow ? Could someone explain this please :) Thanks!

Hello !

So I have a question, I listening to Ken Mcelroy and he says: to get a value of a building, take the net operating and divide it with the going capitazilionation rate.

So, on one building here, I did it and:

Price: 4,3 Million

Income: 434 000 /year

expenses: 75 000/ year

434 000-75 000= 359 000

so: 359 000 ( net operating ) divided by 6% ( capitalitation rate ) = 5 983 333

So: If we say that the net income is correct, and the cap rate, does that then mean that the seller COULD sell it for 5 983 333 and is loosing money but he don't know it ? and then thata if I bough it, I would make a profit of 5 983 333-4 300 000= 1 683 333 million ?

SO Question: If the numbers are correct, income, cap rate and expenses does that mean that the building is worth atm 6 million and the seller is making a loss, selling it for 4,3 million and COULD sell it for the 6 million instead ? or I'm missing something ?

//Rick

Awsome!

Thx Brandon, I'll have to go to bed now for work tomorrow, but I will post some more questions for ya or chat with you :) ? tomorrow, hope u are online then, night night !

Hi !

I have been listening to Ken McElroy audio books, he talks about real estate investing and why MULTIFAMILY investing is the best investment, I STILL have problems to translate his meaning of the words "Multi family apartments" to swedish/what that would mean in my language, as far as I know, he have been talking about 1:st floor and 2:d floor when talking about renters, for example: that old people rather want to live on the 1:st floor instead of the 2:nd floor, he never talks about 3:d or 4:th floor for example, so that means it's only max 2 floor on the buildings he talks about? and I now know that "1 apartment building" can be 1 building, splited to for example 4 properties" so when he says "building" does that mean that he mean a BIG building? or 1 building divided into 4 properties ?

All I want is just 2 know what type of apartments to look for... could u guys help me :( ?

*Hints*

e-book *Ken McElroy "The advanced guide to real estate investing"
quotes:

*residents prefer the 1:st floor over the 2:nd floor
*Multi Family apartments buildings
*150 unit complex ( in my mind, I see a big building with like 10 floors that got 15 apartments on each floor ) but that's not a "FAMILY APARTMENT?"

family apartments is like a house, but u renting it, right ?

I know my text is messy but if someone could explain for me WHat Buildings Ken McElroy is talking about, that would be GREAT. Thank you !

this "Fannie Mae" bank, Could I take a loan at them while living in sweden :S ?

Hmmm...still getting confused...he talks about multifamily units in the book, and u ( Charles ) telling me that multi-family= 2-4 untis, but in the book he talks about deals like 160 units, then it have to be apartment units he talks about ? or can u buy a multi-family unit with 160 units :S ?

U may have right, my understanding is the same as yours.

Thx for answers!

well, I have to do some more reading I guess..

Thx for answering Chad Ballard!

so I got a new question: he says

"before we get into the nuts and bolts of investing in APARTMENT BUILDINGS"

later in the text:

"I'll show you why I feel MULTIFAMILY investment in particular is the single greatest real estate investment available"

Does he mean that apartments buildings is= High big apartment buildings ?

and that multifamily=many families in lots of apartments= many families can live togather in the sam building therefore --> multifamily real estate ?

So to make it easier: is he telling me to buy Apartments buildings/real estate becouse many families can live there in the same building =multifamily real estate ?

Chad, was this what u meant with ur answer ?

Hello ! I'm new here and is interested into investing and was wondering about Ken McElroy's statement in his book when he says:

"The two richest real estate tycoons on the list are donald Bren and Samuel Zell. Both of these men are primarily known for their multifamily real estate investments and are proof that the best real estate investment around is apartment buildings"

SOOO: First he says/claims that MULTIFAMILY REAL ESTATE investments is the best ( says that the 2 richest guys got it ) and then that APARTMENT BUILDINGS is, I'm just getting confused, I'm from sweden and have come up with "flerfamiljshus and flerbostadshus"...so the question:

Is Multifamily Real Estate/flerfamiljshus AND Apartment Buildings/flerbostadshus THE SAME THING OR NOT?

I just want it cleared out so I know what I should focus on... THX !