All Forum Posts by: Dustin Garrels

I'm curious to hear how people think about this.  When you set criteria such as monthly cash flow of $100/unit, for example, do you expect this to be the minimum cash flow for every year of the deal or the average cash flow over the life of the deal (say 5-10 years)? 

Thank you everyone for your insights!

Are there any unique considerations for a multifamily property with only 1 bedroom units?

Thanks everyone for the replies and for clarifying capex is part of cash flow but not NOI.

Of course I run pro forma's on all prospective deals to understand my expected financials, but I struggle with the idea of negotiating the purchase price using pro forma rather than actual NOI and giving the seller value for the improvements I intend to make. This will definitely require a mindset shift.

Thanks for the insight!

When negotiating purchase price, which scenario for NOI do you use? Trailing 12 months actual? If so, do you adjust for the assumed run-rate for repairs/CAPEX (e.g. a as a certain % of revenue) instead of using actual costs?

I am a new real estate investor with a goal to eventually own 50 units. Curious to know what people’s thoughts are about buying an existing portfolio of (mostly) single family homes versus building my own portfolio over time. I’ve seen a couple portfolios for sale and think it might be a much more expedient way to achieve my goal, provided the purchase price is right. On the flip side, you forego the control of selecting the individual properties. Are there other pros and cons I should consider?