All Forum Posts by: Jade S.

@Junior Salters...we negotiated 5.75%, with 30% down.  Given the rising interest rate environment and the 10 year term, I am fairly happy with the terms (not to mention no origination fees, document handling fees, points, etc).  Also, I had an appraisal done, and it came in higher than the final selling price (using both the income capitalization and sales comparison approaches).

@Junior Salters...are the rents for the apartments below market, or are they priced at market rates? Does the complex need any revitalization? If there is some way to value-add on a deal like this and negotiate a lower price, perhaps you might get some partners involved if it's worth it. I think the locals and regional banks are likely to balk at a low DSCR, so you might have a tough time getting leverage as is. I bought a commercial office property in Greenville County recently that is also at a 6% cap. The seller had been asking for a higher price for some time, but we negoatiated a lower sales price. Also, the rents are undermarket and I was able to obtain seller financing over a 10 year term (25 year am). The plan for that office building will be to bring the NOI up with regular rent increases over 3-4 years, and then continue to hold for cash flow or sell at a higher price point.

Agree about the compressed cap rates in the Upstate, more specifically in Greenville County.  When I was looking at multifamily deals, most everything from duplexes to 20 units I found had horrific cash flow (in many cases, cash flow negative) after conservative expense/vacancy allocations with leverage.  Haven't looked in Spartanburg County, but I know Spartanburg has been making strides toward revitalization.  

An interesting article in Fortune highlighting the "creative destruction" occurring in the retail space, which also differentiates the winners and losers.

http://fortune.com/2017/06/09/retail-store-closing...

Not by a long shot! If used as the ONLY source, yeah, you'll get frustrated fast and think "It overheated! No deals". But as one of several avenues of deal flow, you should at least monitor it. Sometimes MLS deals fall out of escrow for a number of reasons, and sellers need to close quickly. Or all cash offers on a new MLS listing can get a seller's attention.

We don't require it, however, we do have a "hold harmless" clause in the lease agreement as it relates to a tenant's personal property.  We also have a page in the lease where the tenants must sign that they have been advised by my PM to obtain renter's insurance.  I know first hand the value of such insurance as I had to make a claim on my own renter's insurance policy when I was just out of graduate school and an upstairs neighbor left water running in a bathtub.  Nasty mess in our bedroom...

@Peace Lily We include clauses in our lease contracts against *any* subletting within rental units.  No exceptions.  Also, it's good to keep tabs on the property to make sure those kind of setups don't go unnoticed.  If you get proof of it, they have then breached the contract and you/your RE attorney/PM will then need to decide on the best course of action (depending on your state laws).  

The eviction victory looks like it finally ended as it should have.  Ridiculous tenant antics.  

In my area, land costs have definitely gone up, making it much harder for builders to build cheaper starter type houses and see a rational margin of profit (not to mention brisk investor competition).  In my county, I'm seeing some townhouse construction and costlier housing options coming online.  Any current housing stock priced at or below below $150,000 are moving rather fast.   

@Jack B....sounds like you got put through a stress ringer from an unmeritorious case.  I wonder if a little call to ICE might have had her singing a different tune.  ;-)