All Forum Posts by: Jay Orlauski

Brandon -  PM me and I will send you the whole thing -  I came up with the expenses by using the following parameters - I always include 5% vacancy, 10% management and some room for capital expenditures  - in this case $2000 / yr.  I've lived in and invested Fresno for 17 yrs now and I'm basing the utilities on my own typical multifamily  bills at $60 / unit and the same with insurance at $75/ unit Fresno. 

As far as cap rates -  51/2 - 6% are closer to the cap rates for residential  around here although you may be able to get  little higher in the c & d class neighborhoods  

Commercial buildings are getting about 7 1/2 % cap rate ( if your buying right now) - those who have owned commercial for a while are probably getting much higher cap rates. 

I hope that helps

Hi Shana  - congrats on thinking longer term and deciding not pay someone else's mortgage! - from what it sounds like - once your  student is done with the unit - you can turn it back around to another college student/s  - you may want to consider something that you can easily rent out to two students at a time - then your student can have a room mate that helps cover the mortgage - if you purchase it near the college then you shouldn't have problem renting it out to other students.  Years from now marketing is going to be a whole new animal and we really can't picture at this moment in time what will be the best way to market this in 4 years - there could be several new technologies that make craigslist outdated  - the key is that if you buy something that can be easily rented to a college student - then you have an exit strategy  if you decide that you don't want to keep the place - it should  be easy to sell to another investor or if the market i down at the time - you can keep renting it for income. 

Closing costs seem a little high ... but otherwise here is what I come up with 

This includes vacancy and expenses but not management because you are living there ...

and after you move out , have raised rents and using management - 

thanks for all your feedback on this - I will followup with you and let you know how things turn out. 

That's awesome Tony - I wish I was up there to attend it. Meetups can be so much fun .. we just had a great one yesterday talking about what to do with a local building downtown that just came onto the market - there were so many great ideas that came out of it and it spurred so many other ideas about other opportunities in the area. Congrats on getting a meetup going - local investors will appreciate you taking the time and effort to bring people together - you're going to love the energy that real estate investors have and it's contagious!

I look forward to hearing all about it -  Jay 

@Katherine S. - it seems like you have plenty of advice here.... I tend to agree with you when you say 

The biggest stickler for DH was the idea that the seller could bail at any point for any reason. 

I agree... that stood out to me.  Also .. they are putting all the restrictions on you  and ZERO on themselves .. this is a one way contract that doesn't really look our for any of your best interests  - only the sellers. If this was an all cash offer - then MAYBE - but you are unsure if your lender will do the loan and so unless you already have some other investors with some financing lined up  - this leaves you very exposed.  This is a really narcissistic contract ...  you could always respond with a counter offer that brings your deposit to $1000 and removes his escape clause - he prolly wont accept it - but you never know .. he could just be throwing out his best case scenario to see how you respond and may be willing acquiesce on several of the clauses.  I cannot advise you as I am not an attorney or contract lawyer - but from what I read in the contract - I personally would not sign it without countering out some of those clauses. 

Best of luck to you on securing your next deal. 

oh .. P.S. - them asking you to pay for all commissions? please. And the big thing ... the fact that if it didn't appraise at that price you would still be responsible to following through and have no recourse or refund of your deposit? that right there made my blood boil... these guys are a real piece if you know what I mean...

Hi Karim - feel free to reach out to me - I work with investors all the time - in fact , I organize an investors meetup group every week ... today's meetup starts at 12:30..........PM me and provide a few more details about what you're are looking for and I will be happy to help you out. I have been investing in Fresno for over 17 years now and my specialty is working with investors.  

Are you in Fresno today? if so .. come on down to the meetup and meet some other local investors - we are actually talking about a multifamily property today - check you messages for my number - 

Make it great day !

Hi Sean - I was wondering if you ever found a real estate attorney to work with? If not - I know of a great attorney that has been a speaker at our meetup group and specializes in real estate - his name is Justin Vecchiarelli  and he is with Sutton Hague - he is very sharp and knowledgeable when it comes to real estate. 

Also- how is your marketing campaign coming going? Have you done your first deal yet or gotten any responses?   Interested to hear more about how your business is coming along. You are more than welcome to call me if you ever want to go over a deal together or if you need someone run comps for you   - If I can help with anything feel free to reach out to me. 

@Tim Chen  I usually share what I can freely because I like to be a resource to others - I also probe a lot to learn as much as I can from others too.. I was just looking at some units today in Pasadena (online) and saw some apartments in LA and couldn't believe what they were asking for duplexes and triplexes - but when I checked the rents ran the numbers - they penciled out - but you'd have to put 75% down to make any cash flow and were still only looking at 2 1/2% cap rate - you could probably put those same dollars in the central valley and get a 16 plex with maybe a 4 1/2 % cap rate - I've noticed a lot of out of town investors from LA,San Diego, and the Bay area.. all looking for someplace to put capital because they are getting priced out of the coastal cities.. consequently- it is making the market even tighter in Fresno and very few ( cash flowing) plexes left to invest in  - but the central valley is big and there are other cities  outside of Fresno that still have opportunities - I think as you mentioned - most of the good deals are going to found off market - so that brings in your network - I think having a deeper network and a strong marketing campaign is more important to success than hording your closing numbers. 

Good markets or bad markets - making money in RE is less about timing the market and more about finding situations that allow you the opportunity to profit - for example if someone is getting foreclosed on and need to sell quickly. Or if it is a short sale situation and your getting the house for less than market - or you pick something up at the auction for dimes on the dollar  - all of these are situations not necessarily tied to the market  - but deal with situations that people face on a daily basis. If you can position yourself to acquire properties like this - you will see increased cash flow and equity no matter what state you are investing in.