All Forum Posts by: Fred Stevenson

I'm evaluating a few turnkey opportunities in KC, MO market and need some comps done so I can evaluate pro-forma's in light of real market value.  In addition, I would appreciate feedback on neighborhoods.  I prefer B neighborhoods that are mostly owner occupied that are in the path of growth and appreciating. 

Here are are the streets and communities I'm reviewing.  

S Haden Dr., Independence, MO 64055

If you can assist me with comps or know any real estate agents who would be willing   that would be fantastic.  Thank you. 

Thanks for replies everyone

I have another option I'm considering in Philadelphia Market with another turnkey provider I trust and have worked with in past.  This is on the opposite end of the spectrum as it is a cash flowing opportunity for a 5 plex. It is one block from Temple Medical School. Neighborhood seems a bit rough with other multi-plexes in area and foreclosures seem to be plentiful. 

This one has already been rented by five tenants. Purchase price is 220k, and rents are 3150.00 combined per month. Cap rate is 14.5% . Also, attracted to this property to diversity my current portfolio which is all SFR's.

Negatives of this one would be higher rate mortgage rate with commercial loan, and all the other negatives that come with multi-plexes versus SFR's. What's attractive are high rates of cash flow, solid PM company and rehab work. Also, I don't know a whole lot about this neighborhood and exit strategy for a five plex since I only currently own SFR's.

So I'm considering both deals.  Any feedback would be appreciated. 

In addition, cap rates are 7%.  I know I can get higher cap rates in other markets, but as I said, I'm looking for more of an appreciation play versus a cash flow play. 

I've been trying to get in Tampa Market for a long time because I think it is one of the best combo markets for cash flow and potential appreciation in US.  However, inventory has been dry, it's a seller's market, and prices continue to climb.  I have a turnkey deal I'm looking at now, and was wondering if other investors who are familiar with Tampa market could comment.  

Home is in hot Port Richey neighborhood. 

3 bed 2 bath home (it will be fully rehabbed by turnkey company)

Square footage is 1396 which is a bit larger than most in this neighborhood

Asking price is 133900.00

Comps are coming in at 134000 according to MLS and 109k according to Zillow (big discrepancy there)

Proposed pro-forma rent is 1175.00 but rent range is saying 1100.00

So no equity in the home to start, and rent is below 1%. However with appreciation rates in Tampa it may be worth it to get in. I would be cash-flowing 250-300 per month even with these #'s as I will be putting 55k down from a 1031 C exchange. IRR's are showing 15%.

I have many cash flowing properties so I'm wanting to diversify into an appreciating market where cash flow can at least cover all my expenses.  My question is, am I getting in this market too late, is this too speculative, and are others bullish on the appreciation rates of this market. I submitted a 6% appreciation rate in my analysis, and showing a 95% return on my investment if I sell the property by year five. 

If anyone else is willing to run independent comps for me, please private message me and I'll provide you specific address.  This would be a huge favor to me to help me make sure I'm not overpaying. 

Thanks for insight and help. 

Regards, 

@Brent Coombs I take exception to your comments that the regulators put the ten limit rule on conventional loans because of people like me.  Not everyone agrees with you that the best and only approach to growing a portfolio is to never have more than ten properties leveraged at a time.  Credit worthy investors pursuing sound cash flowing properties are not the reason the market collapsed.  The bubble was created because loans were given to individuals who weren't credit worthy and the easy money drove up prices that didn't reflect true market conditions.  Loans were also given to speculators who were buying homes betting on appreciation with no regard for cash flow.  I am not that kind of investor.  People like me are not the reason the market collapsed. If I am credit worthy and need a loan for a good deal, why does it matter if it is the tenth deal or the thirtieth deal. Perhaps the deals I have right now are doing so well that I want more of them. I would rather have thirty leveraged homes versus ten paid off homes at this point in my career. Sorry you disagree. 

@David Dachtera  Thanks for input.  I feel like I need an accounting degree or MBA to process what you just said, though. 

@Stanley E. My understanding is only to individuals. 

I also had another lender tell me that a commercial loan to an LLC does count toward the ten total loans. He said that the rule changed rather recently. It used to be that commercial loans to an LLC were not counted, but that is no longer the case. He said that commercial loans to an S Corp are still invisible. Maybe Trump being a real estate investor will get rid of these stupid rules that hold investors back from restoring neighborhoods.

@Jesse Valencia thanks for the great input. Any banks that you recommend to handle this? I have one LLC that holds title to multiple properties, but they are in different states. Thanks