All Forum Posts by: Andrew Kazakoff

Are you looking to sell? Is it easier to sell 1 duplex with a 3 car garage than 2 duplexes with a 3 car garage..i think so. What are your thoughts? If you're not looking to sell, then why bother?

@Bill Fleener Are you looking for hard money or a partner?  Sounds like a lot of people are suggesting 10-12% return for the lender, but if you're buying and holding an apartment building can you find an apartment building with a high enough return to support a long term "loan" that you need to pay 10-12% per annum, plus your mortgage? I think paying 10-12% makes more sense for a flip or quick exit strategy. I agree that finding the money partner first and uncovering what they are looking for as a return makes the most sense.  Then when you find a deal that meets their needs, you have already pre-qualified them as a partner.

You never know what someone will take based on their situation.  If it is a divorce sale, inherited property sale, etc.  But yes, if you are offering ridiculously low prices, then there is probably someone who is willing to pay more.  Check the cap rates that other 2 families sell for in the area, and just increase it by a point of two for your offer price and see if they accept.  Have you put money down with other offers? You don't need to necessarily offer money down with your offer, although money down does make it more serious. 

Very insightful, thank you.  I always thought about these factors but never put them into concrete figures to base my future returns or exit strategy. I didn't realize about the 5/10 year loan terms for a commercial loan.  Any recommendations about some posts to read about commercial loans/terms?

Consider the rents of apartment A and look at your cash on cash return, plus the ability to sell apartment A in the future.  Assume that you sell apartment A for the same price that you purchased it for, plus interest, and tax payments...Was it worth it?

When you find legitimate deals, others will want to take part.  It is hard to find good deals that make financial sense.  Speak to people with money who want to put their money into real estate, then analyze deals and bring them the numbers.  If you haven't done your research (ie enough research), trust me, they will poke holes in the opportunity.  Analyze the deal as if it is your money, but don't forget-no one wants to be a partner with someone who has no skin in the game.  You need to have skin in the game.

Sounds like a great idea.  From the tenant's perspective, it could be even better if there is a small pool, etc on site.  Combining two rooms to a one bed might even make it easier to market, depending on your area.

Gotta find a partner or a bank who will accept less...

In my experience, until you check it out, nothing is for sure. People oversell and exaggerate all the time.

Also, is the commercial property tax rate really that low?

I watched a great video on YouTube that really explained the net operating income as a driving force. If you can buy 120 spaces, and increase the NOI every year, then you have a very good investment and can justify a higher sales price when you want to sell the real estate. https://www.youtube.com/watch?v=JPfj6P5m5wE

In my market, when you raise rents, you are justifying that the property has a higher NOI and therefore you can sell it for more after raising the rents. Parcel ID does not factor into income and ROI.