All Forum Posts by: Anthony Freeman

Cost is our major holdback and not interest rate.  We do Selfstorage and contractor buildings.  And country subdivisions.  Cost of new storage buildings have gone up 80% in the last 3 years.  You can always refi your interest rate but your Cost is fixed forever.  

Even if we have a recession I don’t see our cost going down in our industry.  

Moving forward with one deal where the numbers are good but not great.  Other projects on hold.   Looking at some new projects where the numbers will work.  

Hello,

I'm considering purchasing an investment property in Glen Allen, VA . The the property is a townhome listed at 400,000. However, the builder is offering incentives worth $20,500 ($12.5k discount on purchase price + $8,000 off on closing cost) which brings the sale price to $387,500 and almost zero closing cost. I expect the rent to be between $2,600 and $2,750.

Considering 8% interest rate for the mortgate at 25% downpayment, i expect it to barely breakeven if i manage the property by myself. Would you recommend to buy the property now or wait for a while? I certainly see the trend that home prices have been dropping and it appears to me that i will drop even further if the interest rates continue to stay high. I don't mind managing the property but would you recommend to invest the money somewhere else for now (stock market?) given there is hardly any cash flow. My goal is to generate cash flows in the future (15+ years time horizon). 

Lower your price; never lower your standards.

Never lower your standards. It's such a pain to have a tenant that has low standards! 

I agree with all the other comments. You should never lower your tenant standards. I know that sometimes things can get tough but having a bad tenant will make your life a nightmare in the long run. 

The same way I would in a tight market.  My standards were selected for a reason and while vacancy costs are a pain they are nowhere near as bad as selecting the wrong tenant and also not getting paid while having to pay more money to get them gone.  If you ever feel the need to waiver one of your criteria once ask yourself if this can be the new norm.  If it can there is your answer but if not stick to it.  I have had a relatively easy time with tenants but I feel a large part is how selective I am on the front end makes the back end easier.