All Forum Posts by: Yoav Schatzberg

Hi all,

I'm reviewing a P&L for a 7 unit building, and I've got a couple of (basic) questions:

1. What am I looking for in here? Other than actual NOI and Expenses, what should I be considering?

2. Are there any other documents I should ask for?

We could sell if we needed to.  We have cash reserves to sustain it without eating into W2 income assuming no disasters, for the whole loan, though I’d prefer not to do that.

@Dan H. some other Qs and notes in the deal:

* we will be managing the property ourselves

* what assumption would you make about % of income reserved for maintenance?

thanks again

Thank @Dan H.

This was very helpful to think about.  I can provide some real numbers for you, would love your opinion:

purchase price: $1,000,000
Loan Term: 20 yrs
Loan Rate: 0%

Rent: $36000 annual, no rent increases over time.

Other factors:
* Potential to agree for tenant to pay for any maintenance fixes < $10k, landlord to pay for any > $10k
* Tenant intends to stay in the condo for 15 yrs

Let me know what other info would be helpful.

Thanks Gents,

I'm sure I could find a better deal somewhere else, but I'd like to invest in markets that I know which are all in CA and mostly in expensive parts of CA (San Francisco, San Diego for example).  So finding a first deal that is cashflow positive and all the rest seems like a challenge.  I agree with your assessment though.

I have the opportunity to by a 2br 2ba condo in San Diego, in a neighborhood with the best public schools, from a family member.  We'd be buying at market rate, but this means we could get Seller Carryback financing at 0%.  That said, it comes with a few catches:

1. We would need to rent back to the family member, who is on a fixed income.  This means cash flow isn't possible pretty much for the life of the loan but we can theoretically sustain that if it's a good investment, and we'll have a solid tenant who takes care of the space.

2. There are some special assessments coming up, and I've heard that some of the neighbors have been dropped by their home insurance providers and are struggling to find affordable home insurance in SD.  So I wonder if we're in for drastically increased insurance expenses ahead.

i havent used the BP calculator but the Return on Total Equity will be north of 10% for the first 7 years.  I'm not sure whether this is a deal that's worth it, or even how to think about the benefit of a property that will not cash flow for 15-20 years.  

What do you think?  How should I think about this? I can afford to have it be an investment for my kids and not cash flow for me, but I could also deploy that money elsewhere.

Hi David,

Yoav here.  I don't own any rentals yet but am closing in on my first one hopefully this year.  I was listening to your podcast about negotiating a deal while under contract and I really liked your approach.  As a Buyer that maximizes the benefits I get out of the transaction.  My question to you is:

As a real estate agent, does strategizing this way (first credits for inspection stuff, then credits for low appraisal, etc) hurt your standing with the sellers agents? I understand that being an agent is a relationship based business, and so my concern as the buyers agent is that the sellers agent wont give me any of those "There are multiple offers but if you raise the price by $50k its yours..." wink wink nudge nudge type pieces of information in the future because they'd rather go with an agent that isn't going to help the buyer nickle and dime their seller.

Thank you,

Yoav

San Francisco, CA