All Forum Posts by: Balkar Singh Kang

Hey Balkar,

Typically, the CoC in the first year is less than across the board. The 'advertised' Cash on Cash is estimated as an average (usually over 5 years). The first year is the hardest as the business plan at acquisition has not started yet. It will take the first 12 months to do renovations (lower occupancy & higher costs), bringing the current rents to market depending on where lease terms are currently, and etc.

7% preferred means (as an example) that if the first year cash flow is only 6%, the other 1% will accrue to your credit until it catches up at a later time when cash flow improves or an equity event (sale or refinance) cashes you out.  

The 70% equity is all means that after the 7% guarantee is met, any additional cash flow & equity is split between the sponsor and the investor 70/30.  Investor always gets paid first.

Remember that these MF deals are not in a vacuum.  The occupancy fluctates, the collected rents fluctuate, the repairs and expenses fluctuate, all on a monthly basis.  Some months have much higher collections than others, so the estimates are just that since no once can see the future exactly.  

Hope this is helpful. 

In my dealings with Section 8 the amount they end up allowing for a unit is never very clear.  My understanding is it starts with their determination of fair market rent for the county.  Then when there is a prospective tenant they make a determination after the property inspection taking into account overall condition and the tenants adjusted gross income.  The adjusted gross income also determines the amount Section 8 will pay vs the tenant portion.  I have had situations where section 8 pays the entire monthly rent but for most this will not happen.  It is also important to be patient with the churning of the government gears.  When a tenants income changes for the bad, you can be with out the tenants portion for a month or two but they will always catch up.  Section 8 works well for me.  BTW I get more rent with Section 8 in the city on the west side for a 2 br single than I have ever been allowed for a 2 br single in Euclid, same sq ft with far less in property taxes for the Cleveland property.

I listed my two-bedroom single-family house for $1250, which is below the Fair Market Rent (FMR) of $1284 in the Cleveland zipcode 44125. However, today I received a rental determination from CMHA for $953, which is below the FMR. I have not accepted their offer yet.

The message from CMHA states that "The Housing Assistance Payment will be $953.00 and the tenant portion will be $0.00"

The tenant agrees to pay the balance. 

I need guidance on whether I can approach CMHA to request an adjustment for the rental determination. Additionally, how should the contract be structured to cover the remaining portion to be paid by the tenant?

Hello, do you have any properties in the Cleveland markets? If so, I have 30 guys, we do about 150k a month in repairs and rehabs for our out of state and country investors  

Good Luck 

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern.