All Forum Posts by: Ben Fernandez

An attorney can get you all squared away on the asset protection side of things. You just need an LLC of of a state that doesn't disclose, that owns the LLC that will own the property.

What I recommend, for any asset you buy in any location, especially fo an A Class asset that will likely have little to no cash flow, is that you evaluate your potential CapEx expenses effectively. Meaning you use the life-left of all the components that will need replacing in due time and factor that into your offer.

Components expiring within a short period of time needs to be accounted for as deferred maintenance. After all, your CapEx is apart of your operating expenses and is unique to each potential deal. If you need a tool for computations, feel free to connect with me.

My experience was fine for the tenants I've had. However, I know everyone's experience is different.

There are good people who utilize supportive programs. So my take is that you need to screen well regardless of the tenant type.

You may possibly need the occupancy rate if it isn't already factored into the revenue estimate.

If it's already factored in (assuming it likely is), next you'll need to factor the operating expenses so you can arrive at a net operating income. Essentially doing a cash flow analysis.

Once you have your NOI, you'll need to find the cap rate for that neighborhood. If you can't find a resource, you may need to work a few like-kind sales backwards using the gross income or NOI (if given).

At that point, you have what you need to determine the market value using the value formula of Value = NOI/Cap Rate.

Your need the income to meet the DSCR required by the lender. Get it occupied first with a lease. Also verify your season period requirements with the lender.

All you need is the cap rate for the area. Commercial based assets rely on NOI and cap rates to compute value. The same applies for STRs.

@Julio Gonzalez Thanks!

@Raghavendra Pillappa No problem 

That's awesome! Congratulations!

Be certain you've fully evaluated your cash flow by doing a cash flow analysis.

I leave it to you to confirm you've taken in consideration the following potential costs: CapEx, maintenance, property management, water, sewer, trash, vacancy, turnover, taxes, insurance, etc.

Small towns can be lucrative depending on the unemployment level, population trends and safety. I live in Lancaster, PA and it's a lot here that's very positive.

Our market is historically pretty stable and hasn't been subject to sharp increases followed by sharp decreases in property values. Our unemployment is very low and there has been a trend of increasing population and employment.

Do your research and determine where it is you want to invest. Then make sure there are ample property management companies in case you'll have any attrition. If I can be of any assistance, feel free to connect.

The house hacking is fine. However, even within house hacking be certain to evaluate your exit strategy to see how the asset performs if you were to move. If you'll be there for the life of the loan, no worries...It'll just reduce your overhead and will be always favorable.

In regards to the syndications and STR's, the syndication would be the 2nd place option. However, you need to evaluate the GP's ability to perform through their history. Once confirmed, they will be passive and can meet your expectations as described.

The STRs, fall in last place according you what you've expressed. Simply because, if you'll don't want to be a landlord on a single unit, then you likely want to nothing to do with managing a STR. These are very demanding from a management perspective.

An option, you haven't mentioned, would be to consider investing remotely, where assets are more affordable. The next objective after locating a target market, would be to determine if your primary goal is appreciation, cash flow or a little bit of both. Depending on the asset class, performance under each category aligns accordingly.