All Forum Posts by: Jeff Greenberg

Now I see where your  higher cap rate comes from. Cap rates are typically not even considered in Sfh, since they are based on comps. 

He was on Joe Fairless 401, I was on 47 and 424.

@Erik W. It does matter where they put if they are basing their price on NOI. Now days we are not really looking at cap rate but coc over the full project. As far as the 50% rule it helps as a guide. I have found the in higher end markets the % is lower due to the inflated rents. Smaller properties usually are also lower with less expense per unit. We also see that in student housing even though the expenses are higher so are the rents.

12-16 caps not sure where you are investing????

@Abel Sng you had me agreeing with you all the way up to "If your number is grossly different than what the seller asks then typically it's just worth moving on to the next deal!"  Make an offer that works for you worse case is they can turn you down.  Explain to the broker why you disagree with their valuation.

Here is one to get you started.

https://www.biggerpockets.com/forums/223/topics/22..

@Scott Skinger Both the capex and the debt service is below the line and does not affect the cap rate. Cap ex is typically not an ongoing expense and should not be included in operations. Your job as an investor, is to verify what is included above the line, is appropriate and is not put into capex just to increase the NOI and therefore the property value.

@Idaly Barrera  Much better.  Good luck to you.

@Idaly Barrera How does this sound?  You the experienced investor take time out of your busy, and take me under your wing.  Spend your time teaching me everything you know, and if you happen to help me find a deal, and help me close on it, I will give you half the profit.  What is wrong with this picture?  

You are not the first nor the last new investor that is looking at what is in  it for you.  The experienced investor does not need YOU!  What you need to ask is what can you do to help out the investor, and you can hope for guidance, direction and words of wisdom, and if you are lucky some scraps of the profit.  Many of us have been around the block and have either spent many 100s of hours, 10s of thousands of dollars on mentoring, or both, to get where they are.  Why would you insult them by saying that you will give them half, when they rightfully earned it all.

There are thousands of new investors that want to be mentored.  Act like you are ready by offering your services to someone that is doing what you want to learn.  Don't insult them by offering something that is not yours to give.

Nothing personal.

@Mitul Patel Congratulations on taking action.

Although I don't do residential property flips, it is my understanding that the lenders want you close in your name not an LLC as we do in CRE. You could do a (TIC)Tenant in common with each of your names.

If you live in CA and are buying in CA, CA wants their $800 if you form an LLC.

The other issue I see is, if you are pretty much controlling the deal and the other investors are passive, you have formed a security.  Now you need to engage a SEC attorney and get a PPM.  You don't want to be on the wrong side of the SEC.

What type of property? SFH, MF, CRE, Self Storage. I am guessing SFH since this is in the starting out section. Although I don't do SFH, I would want to know about the age of the major systems, such as the roof, the HVAC, water heater? What is the know deferred maintenance? Most of this i will be able to get from the property inspector, but this will help me figure my immediate capex before I make an offer. I want to know how far the schools are, shopping center, bus stop (for a C property), employment centers. Quality of the schools. What are the market rents.

I should know a lot of this prior to visiting the property, but is good to hear it from the broker as you confirm it for yourself.

Thanks @Bruce Petersen