All Forum Posts by: Account Closed

Emily Mueller which local REIA group's event are you attending?

Dennis Tierney is exactly right. In the multifamily world of deals 75 units or larger, 95-99% are sold through commercial brokers. The company I work for owns 9,000 and we bought around 1,500 units in 2014.

Chris Christianson not sure you need to wait. Plenty of new apartment development going on in NE these days.

One thing we are seeing, especially in multifamily, is cap rate compression due to lack of alternative investment opportunities. I think this cycle has legs as there is some insane amount of capital  chasing deals right now. 

Many funds are more than happy, well maybe not happy but don't have a choice, and will continue to buy real estate at very low cap rates. I was at a seminar the other day where an Asian buyer said they have no issues with a 4-5% cap rate when their cost of capital is almost nothing. And he followed that by saying, "Where else can we place our money right now?" 

Imo, this cycle has seen the perfect storm of demographics, low interest rates, inability or lack of desire to own a home, lack of supply and plenty of equity/debt available. My guess is another 24-36 months of massive transaction activity.

@Jon Holdman 

ARV is important because we are planning to finance this renovation with a construction loan, followed by a refinance of our current mortgage and the construction loan at the end. Hoping to keep my cash on the sidelines if possible. I've been working with a couple of different lenders to make sure we have a good idea of the funds that will be available to us.

Developers are building new homes in our neighborhood...tearing down $250k homes and selling new homes for $800k - $1m.  I live in a sought after neighborhood in the city with the #1 rated high school in the state 4 blocks from my home.

Our home is currently worth approximately $400,000 today.  We currently owe $288,000. Lenders are willing to finance up to 80% loan to value based on the after repaired value.  So I had assumed that our house would be worth approximately $550,000 after renovation, which would would give us $151,000 in construction funds to work with.  We could come out of pocket to cover architect, closing costs and the like, but were hoping to not have to put too much more cash into the actual construction.

Our current foundation is ~900sf and our house is currently 3 bed/2ba and 1,750sf.  Very small kitchen with older appliances.  Home built in 1938.

Our plan is to bump out our back wall and create a bigger, open modern kitchen.  We are also looking to expand our half story upstairs and get 3 bedrooms and a small laundry room up there.  Knock out a couple of walls on the first floor to open up the floor plan.  New mud room leading out to the back yard and a new garage.  We only have 14 windows so would like to get all new windows as well.  

A brand new construction home across our alley just sold for $890,000. I feel like for a nicely renovated home on our lot with what I described above $550,000 ARV wouldn't be hard to achieve, but sounds like maybe I'm off base on this one.

We would not be doing this to sell.  We want to stay put and love our street and neighborhood.  But our growing family is quickly outgrowing this space and it's beginning to feel very crowded due to choppy rooms, small rooms and not an open layout.

I'm looking to finance a renovation of my primary residence and one of my lenders is telling me that if I spend $150,000 on a renovation, I can expect it to add $50,000 or so of value to my home. That seems too conservative to me. I understand I may not get a dollar for dollar value increase (spending $30,000 on a new garage isn't going to increase our value by $30,000), but $0.30 on the dollar seems quite low to me. I'm trying to finance the entire project and I'm current sitting at 70% LTV on my current mortgage. I can get funds up to 80% of ARV, so the appraisal is crucial to my ability to get the necessary funds. Assume home is in a very strong location and assume we would do a high quality renovation and use an excellent architect and builder who's work I know and trust. Is this $0.30 per dollar spent a common metric?

Originally posted by @Vonetta Booker:

I'm looking at various properties for my first buy & hold rental--decent, middle-of-the road neighborhood, REOs, short sales & HUDs that are in fair condition.  

Is $400/mo. after expenses a decent cash flow for one's first property? This is a 2/1 HUD going for $52k, w/ $2100 in annual taxes, potentially getting $1200/mo in rent, factoring in 10% each for monthly maintenance & capital expenses, and 8% for monthly vacancy expense.

It doesn't seem like a whole lot of cash flow, but I'd like to know what you guys think.  (I've calculated would-be properties with higher return numbers, but they tend to be in worse neighborhoods.)  Thanks!  

Is 10% per month for maintenance & capex and 8% vacancy enough for a SFH?

http://www.forbes.com/sites/erincarlyle/2014/12/18...

Experts expect a more balanced market in 2015.  What do you guys think about these predictions?

1. Prices will rise more slowly

2. Affordability will worsen

3. The buying frenzy will fade

4. Mortgage interest rates will rise

5. Millennials overtake Gen X as homebuyers

6. Rent increases will outpace home value growth

7. Multifamily will reign 

8. Builders shift to cheaper homes

9. Foreclosures will match pre-recession levels

10. Markets driven by fundamentals

11. The wildcard: global geopolitics

@Sawyer Lubke what neighborhoods are you marketing in?

Will Barnard makes sense. Thanks for the thoughts. Knowing all markets are local, do you see or have you heard a lot of markets acting similarly around the country? ie do you see the national SFH market slowing too?