All Forum Posts by: Justin Cambra

JP I can tell you have been thinking a lot about this. To be able to analyze what the ideal financial or practical decision is we would need the missing piecies of info to paint the financial picture (interest rates, orig purchase price, current estimated value, PMI amount, etc). I am not a licensed financial planner but I think it would be interesting and fun to help you work through this situation. Shoot me a note if want some free help.

PS I like your goal of 10k passive income in 4 years. That is one year faster than I am planning. 

Preston, I ran into similar issue in yakima. I purchased an 11 unit that had some knob and tube still in it. When getting insurance quotes I was getting higher premiums than on the pro forma. I ended up asking seller for his insurance agents number. I was able to get a similar policy at about same price. 

@Ray I have only done one commercial deal but will give you my details to help give you some context of the market. In May I got a commercial loan with 20% down, 3.75% interest that was fixed for 5 yr, and amortized over 25 years on similar sized deal (285K purchase price for an 11 plex). I recommend checking out a few more banks to make the deal cash flow even better for you. I used US Bank for my loan.

John, I am a newbie too but can give you my two cents. I am from Seattle area and we are experiencing similar +/-5% cap rates here. The market is pretty hot with a lot of cash buyers so people are willing to pay more (ie lower cap rates). A couple hours away where it is less competitive you can get 8-10% cap rates. Cap rates assume you purchase the property with all cash so it would be cashflow positive. If you are like me and don't have a lot of cash you will still need to factor  in debt servicing to see if it will cash flow. What I see is that a lot of the 5% cap rate places in my price range dont cash flow much if any. At the end of the day what it comes down to is what your investment goals are and what you are willing to accept (ie cashflow, cashflow+appreciation, or appreciation). For me I am focused on cashflow only and try to make at least $100 per unit per month. I recommend using the cap rate as a barometer to understand if you should dig more into a deal to see if it will hit your investment goal. In my area and in my price range that tends to be >=6% cap rate. Best of luck!

Suggest you reach out to Enrique Jevons of Jevons Property Management.