All Forum Posts by: Bryan H.

Brian,

Loan origination costs on commercial paper should be ok at 1%. 2% acquisition costs on a 6-plex are likely too high - all you're buying is an appraisal and title fees/policy. There likely won't be any costly surveys. Each bank is different - just ask.

I am more concerned with your cash flows. Looks like you're escalating everything by 2%, which is fine. But, economic occupancy of 93% in a building full of $675 tenants is a pipe-dream. This is why I think at $275k you'd be overpaying by a good margin...

I don't like the spreadsheet particularly, but it does prove the IRR and provide for NPV. Have you done those analysis? I bet not, since you don't have the exit cash flow in the page I am looking at :)

Run this with 86%- 88% economic occupancy and see what the numbers tell you...:) 

@Bryan H.

 Would you mind sharing your spreadsheet? I can't help much on the analysis part but I was impressed with your sheet and would like to use it in the future!

Your vacancy economic/physical is too low - go with something like 14% to be safe. For $675 rents, $275,000 is tight. CapEx after a few years will be an issue more than you think. I'm thinking $245,000 - $250,000 tops...absolute tops.

Hope this helps, and good luck!

If I was being sued I wouldn't want the 16 year old kid working for UPS to be involved. Have your attorney be the RA. 

The project is 100% paid at this point -- a mistake I will never make again.

A general question: have you found contractors more responsive to 'carrots' or 'sticks'? In other words, what do you think would work better: bonuses for on-time completion of milestones, or penalties for missing deadlines?

Thanks again!

@Bryan H.

Curious what market you purchased that in and with figures like that you could not have possibly purchased that from a TK provider right? Might have been possible doing it yourself.   Either way thats a solid deal, just dont exist like that anymore.