All Forum Posts by: Kevin Young

@Johnson H. i'll be in the sbay on the 15th ... have this one on my ical ... looking forward to meeting you!

@Scott P. $5800 is too low IMHO.  

i own a 110 yr old 6 unit edwardian building in SF ... bought it 10 years ago with everything refreshed (e.g., fully upgraded electrical, plumbing, reinforced foundation, new roof, new kitchens/bath, new paint, new everything, etc and all permits to prove the work.  it was as new as you're going to get for a 100 yr old building and overall, we've had minimal maintenance issues and are accruing more for just cap ex then you're projecting for both maintenance and cap ex on a partially rehabbed building. 

for perspective, we accrue $6100 annually for cap ex on top of all typical operating and maintenance expenses.  we set our cap ex budget by getting quotes on roof replacement, exterior painting, etc factored in the life span + increases for inflation (e.g, we assume its going to cost more to repaint in 10 years then it is today, so we factor that inflation into our calc) to derive an annual accrual amount on cap ex.  don't take the seller's or your agent's word on what you should be reserving...do your own homework and come up with a realistic figure.  

i don't consider pro forma numbers unless they are higher then my estimates, which is rare ...  and am cautious in using averages unless you are comparing identical properties in the same region. 

@Sharon Jacas its been my experience with smaller commercial loans (e.g., <3mil) a bank will look at (1) the property (2) your experience (3) your net worth/income/financial staying power.  if 2 and 3 are weak, then bring in a strong partner(s) who have a strong operational track record or strong finically.  i'd talk to a mortgage broker who works with smaller commercial loans and/or talk directly to the commercial folks at some local banks, they'll let you know what will be evaluated when underwriting the loan.   

also, i get the sense from your post that you're pooling funds for the first time.  if that is the case, you are syndicating and should consult a sec attorney.  i know a few good ones...PM me if you'd like their contact details. 

@Account Closed i'm a commercial MF investor ... would be happy to connect.  PM me and lets set up a time to chat. 

One’s ‘ideal’ price may vary from investor to investor and is predicated your expected return on capital. 

For example, ‘ideally' I'd like to get a 20% IRR (hard, but possible especially with a repositioning), so I back into a price by plugging in the income, vacancy, and realistic expenses, down payment, mortgage details, etc. … then I play with the price until I hit my ‘ideal' IRR. That derived price is my strike price and I'll offer little below to allow negotiating room.

You first need to start by identifying what your goal is. Then mathematically back into your offer price.  

I use the ccim forecast templates built by gary tharp to run my analysis. He offers them free for download. http://www.garytharp.com/forms/  If you have an iPhone, you could use TheAnalyst app, which is built on the same foundation ... it's my favorite number crunching app ;-)  http://cretm.com/theanalyst/

I have no affliction with Gary (other then I'm a ccim candidate) nor the App...I just think it's cool. 

Hope that helps. 

@Brandon Turner update on airenvy.com... i spoke with Charlie from airenvy.com yesterday and he indicated they are a startup out of san francisco, with full services ONLY in the SF bay area, but looking to expand to other metros.  sorry, they're not yet in Denver.  full services = what you see in the video posted above.  They also offer limited services outside of the SF bay area that i'll describe below. 

FULL SERVICE offering which they're charging 12% (only in SF Bay area):

- first month free, then they charge 12% of collected income there after

- they work with you to gather everything that's needed to post your rental on several sites. they handle the posting.  

- they take all calls, vet customers, arrange logistics with the customers, etc

- they provide sheets and linens and clean after each customer. I believe there is an additional charge for cleaning. 

- provide 24/7 response for customers, that includes sending someone out to assist customers if their is a situation that warrants on-site help

- provide instructions on how to use different things in the house (i.e., how to use the dishwasher)

in all, for 12%, it seems like a great service. Its basically like a remote hotel service.  its still in the infancy stages, which is also its drawback, right now as its only in SF...  I don't see them having full services in kona hawaii for some time :-/

LIMITED SERVICE offering which they're charging 1% (outside the bay area):

- first month free, then they charge 1% of collected income there after

- they work with you to gather everything that's needed to post your rental on several sites.  

- they take all calls, vet customers, arrange logistics with the customers (i.e., they provide information on how to get to your place, where the key is located, etc)

- they collect payment

- coordinate with the housekeeper that you set up to clean your house.  difference here is that you need to find and pay your house keeper. 

YOU ARE ON YOUR OWN TO:

- you are responsible to make sure the customer gets access to your house. e.g., set it up with a key box, electronic lock, or convince @Joshua Dorkin  to handle keys for you. JK

- you are responsible for linens/towels, and servicing them.

- there is no 'on call' service ... customer would call you ... or just give them Josh's phone number...he's local in denver ;-)

in sum, for 1% they screen customers and get them in your place.  for me, i'd pay 1% to not have to deal with the phone calls...  i'm not sure how widely tested the limited service is.  if i pull the trigger on renting my kona home, i'll give them a call, but would want to meet them in person in SF (convenient for me as I live in SF) to make sure they'd pick the same people I would.

Hope this helps. 

@Brandon Turner i just checked out their site and signed up.  i have a second home in kona hawaii that i'm considering renting out when i'm back in SF.  i asked them to contact me to walk through the process ... i'll circle back and let everyone know what i discover. 

@Anthony Gayden i suggest verifying what your property tax will be in relation to your purchase price.  i'm not sure how taxes are based in your area ... in some regions taxes are based on purchase price ... so using last years amount may be an artificially low amount.

@Martha Bader i'll PM you with the contact info of my RE attorney, he's in SF.  

@Chris Rey i just came across a new site that provides MoM rental trends and comparative analysis against your subject property address.  http://www.rentjungle.com/rentdata/

i like how it lists historical data.  the limitation: not every market is represented.