All Forum Posts by: Amol Dewhare

Hello Greg 

Appreciate if we can talk and see if we can make it work.

Feel free to give me a call at 925-216-8320. I am based in Dublin CA.

Looking forward to talking to you soon.

Regards

Amol

Hello All

Reaching out to all BP members for any recommendations for great Multi Family Property Management companies in Des Moines, Iowa. 

The property management company needs to have management experience of mid sizes apartments ( 40 - 60 units ) in Des Moines with a proven track record in value Add space and understanding of the Des Moines area critical.

Appreciate and thank you in advance for all recommendations.

Regards

Amol

@Jonna - Thank you for the response. I was asking more from a generic perspective. When I get proforma from an agent or broker and I want to do a quick a dirty 10 minute run to see if the deal even makes sense, I want to be able to assume say 5.25% and proceed and hence the question. I think right now it is safe to assume that a 25 year fixed with 30% down would be 5.25 in most Metros. Concur ?

Hi All 

What mortgage rate should one consider for multi family ? Say I want to raise 30% down with private equity and finance the balance 70% with a mortgage. What would be ball park figure for initial due diligence ? 5.25% or 6 %, more, less ?

Appreciate your response.

Thanks

I think the primary difference is that in Commercial properties, lenders are more interested in the Cash flow and potential upside when deciding to finance and not little emphasis on buyers individual credit worthiness or cash in bank. ( Don't get me wrong, he/she still needs to show 30% down payment but that is not necessarily his/her personal income).

Flip that to the residential side - Owner credit worthiness is the most important criteria and the residential asset is secondary. If you are able to get a million $ property for 600K, bank is not going to lend if you do not have the 120K ( 20%) in bank.

On the sell side again, you could have a really great commercial asset in a not so great location and you can expect top $if you want to sell. Residential on the other hand is tied to the location and if the location is depressed, your home price will be depressed as well.

This is the basic difference. If you get this, then you can talk about advanced concepts like Tax advantages, Depreciation, etc.

Hope this helps.

Cap Rate and  Appreciation are the two most over hyped terms in Real Estate.

According to me what matters is 

1> COC ( Cash-On-Cash) ,

2> Annual Returns and 

3> GRM ( Gross Rent Multiplier).

You could have a 5 cap rate and when you put the numbers together and slice the pie, you may realize that it does not provide 12 - 15% investor return or you have to sacrifice a lot of your equity to meet those returns, in which case its better to not do the deal and walk away.

GRM is a more valuable apples to apples comparison which will justify your offer price more in line with reality than speculation.

Hope this helps.