All Forum Posts by: Dan Rowley

@Allison Flores it's a hot (sellers) market there so difficult to make the #s work for cash flow.  If you're betting on appreciation then maybe.  I have investments there and am not a realtor.  But, I'm sure others that are local there can weigh in.

@Duane Richards If you can find anything (new) that performs better in UT or ID markets please PM with details !

@Sara W.  there are 50 states and you only live in one, so that tells you that there are a lot of potential opportunities out there they 'may' well be better than your own state/city.  Maybe you're lucky and live in a state where all the conditions are ripe for good investment, but maybe/probably not... I don't know a lot about Boston/MA markets but they don't generally top the list of best places to invest.

@Chan Le

Good topic. I do feel your return assumptions for buy and hold are too aggressive. If you can find those returns though in decent neighborhoods then please let me know where ;).

Both syndication and big and hold returns have come down as prices have risen

Another thing to consider is less downside risk with a syndicate, as that is non recourse debt and so they can’t come after your own assets if something goes wrong

@Nathan Allan  Brandon hall www.therealestatecpa.com   I can share his email/phone with you if you PM me.

@Garrett Hollenbach if the Loan is not in your name then bank won’t have the clean recourse to go after assets/collateral if you were to default on the mortgage

What I've not seen mention of in this thread is the reality of our historically low financing rates and it's impact on the 1% rule.  This 1% rule has been around a long time and so over most of it's history interest rates were much higher.  Obviously, current prices have adjusted upwards party as a consequence of this cheap financing. 

So what I'm saying is if you were to compare cash flows on the very same property back in a more 'normal' interest rate environment of 5-6% interest rates at the 1% rent/value VS. at today's 3-4% interest rates  at a .75-.80% rent/value ratio = you'll find that the cash flow yield is essentially THE SAME. 

Of course, if you are buying cash this does not apply but if you can qualify for financing today why on earth would you not finance your purchase at the current rates?

@Jeff Wagner   ok thanks for the clarity so that would be 1.1% but would obv. depend on their assesses value.  in some places it's hard to figure out their methodology for valuations.  And I get it maybe this rate is abnormally high for AL  - i heard the state avg is ~.4%-.5%   but it's not terrible vs. many other locales.

@Duane Richards  feel free to PM me.  Certainly their model does require patience.  Note that their cash flows are quite close to projected (and even better now that financing is so cheap) PLUS the appreciation I have seen is well beyond their projections and I assume you're familiar with the UT market and that it's blowing up and so the $ amt of equity I've gained is major.  Of course it's heard to time the market.  Also if you look at alternatives you likely can't find an older fourplex that's in need of TLC at as good a cap rate as FIG historically offered.

@Jeff Wagner  I'm interested here - so by exceptionally high what % (of property value) are you talking about.  i.e. how much higher are madison county taxes vs. state avg?   By all accounts I've read AL has one of the lowest property tax rates in the country.