All Forum Posts by: Andrew Johnson

Justin Michael Johnson So at the moment you haven’t said what the “better option” looks like. So it’s hard to know if you’re juxtaposing $150 per month vs. $200 per month or $700 to month. There’s a lot of “grass is greener” mentality in real estate investing and it doesn’t sound like you know (today) how what you own pencils out.

Romela Jover You have narrowed it to two cities, you seem to have a focus on cash-flow, low property taxes, etc. Run 10 deals in each market and see where you end up. That said, you haven’t said why these are the final two, if there’s a connection to one or both markets, etc.

Michael Randle For whatever it’s worth, I think you’re looking at the wrong area. If you want to practice analyzing deals I wouldn’t start at the cap-rate. The “issues” are always in how you come up with an accurate NOI estimate, estimating rehab and holding costs, etc. I’d posit that any decent commercial multifamily broker can tell you the cap-rate of a Class C small apartment building in Phoenix. Granted, I can’t see Class C being a 4% cap in Phoenix but that’s the simplest variable to solve for.

Raquel Singer Why? Why? Why?!?!?!? Even if it’s delivered “vacant” it sounds like they’ll be new to returning “squatters” within a week. So are you going to hire 24 hour security? Become best friends with the sheriff? I’ll go out on a limb and say the doors had locks before the squatters go in there the first time. Anyway, it sounds like awful pain to me, 3 am phone calls, destroyed units, and lots more fun. If you do go through with the deal you might get some good stories for a book 🤷🏻‍♂️

Rick Thompson To start: The lease is the lease. During escrow you’ll get copies of the leases to review so you’ll know how long you’re obligated to the current arrangement, what the terms *exactly* are, etc. Then you can look at what happens with bringing rents up, obligating tenants to pay utilities, individual metering costs, etc. If you’re “in it for the long haul” a few months of remaining leases that aren’t what you want. So some of this depends on the timeframe you want to hold. 5 more months of a “bad” lease matters far more of you want to own for 4 years compared to 40.

They’re across the country and I only do my fly-out-and-visits around 1-2 times a year. But I also buy newer properties that are easier for me to trust my PM to manage. No big problems, no giant rehabs, etc. If I was undertaking those, my perspective might change regarding remote absentee ownership.

Kelly Carter Way too soon to make any math assumptions :) Because... 1.) Two weeks is waaaaaaaay to short a window. Especially because... 2.) You’re looking at on-market deals where you’re competing against owner-occupants, and... 3.) You’re trying to get cash-flow with 100% down, and... 4.) Charlotte isn’t exactly a horrible market. People want to live there and investors want to buy there. Come back after 90 days and revisit your strategy. I suspect you’ll still have huge challenges but at least you’ll have a reasonable timeframe.

Robert DelVecchio I’d throw the classic “10% cash-on-cash” metric out there but I have to admit, it’s not what I live by. There has to be a threshold to make it worth (my) while. At the moment if it’s not going to throw off (on my paper pro-forma) $1K per month I usually take a pass on it. So that leaves me with a very narrow area to focus on. It means I can’t look at those $50K homes. But I might be able to look at 10 units for $500K and see how that looks. I also have a higher threshold (risk return) if I look at a market that I don’t know...yet. Not to say my ideas are right vs. wrong but they work for (and are relative) to me.

Michael Cavitolo NOI is one factor. NOI of $15K on a $1.5M purchase is horrible. But and NOI of $15K on a $150K purchase might be great. But that doesn’t mean that the $150K property is a good deal 🤷🏻‍♂️

Tab Teehee Sounds like you ended up in a good spot. My (limited) experience with commercial appraisals is that they take a few weeks. Now can you get it done in a week? Sure. Just turn your $3K into $5K 🤷🏻‍♂️ I remember getting asked how quick I (not the lender) “needed” the appraisal as there were a couple of different timeline options.