All Forum Posts by: Jeremy Komer

@Michael Plante

Blackrock purchased sfh for a few reasons.

1) easy to model the costs and rents

2) supply is larger

3) they can corner the rental market in certain neighborhoods

It's relatively easy to model model the costs of a post 1980 sfh and easy to model the rents.

If your looking to spend billions it's hard to find enough small multifamily to satisfy that demand, also they are usually older which makes estimating costs harder.

It's simple to just buy most of the available homes in a certain neighborhood that are good rentals with billions of dollars. Once you own the supply of rentals In a neighborhood you can to a large extent participate on price fixing due to your small regional monopoly.

And as an added bonus, it's a good inflation hedge against the trillions of dollars of other investments you've made.

@Cruz Gartner

My plan is to do it in 9, although I'm not sure I would quit working.

I don't mind my job so the freedom to leave might be what makes it more rewarding in the long run.

I also would love to be a business consultant with small and medium business that usually couldn't afford a consultant. I really feel like I can help my community that way and make the world around me a better place!

@Grant Doyle

Find a mortgage broker, plenty do 25% down on a 30 years.

I know united wholesale mortgage does, loan Depot, etc

There is really no way around the capital needed to buy investment properties right now unless you can get seller financing.

But given the value the market brings seller financing is rarely an attractive option for a seller at the moment.

@Russell Brazil

Every new high the chicken littles come out.

Best thing about the economy is that If you bet it will get better and bigger your usually right

Hello Everyone,

Ran into a new situation, the place I am under contract for does not have current leases with the tenants.

They say they did not respond to the previous notices and thus the lease that expired in 2019 rolled into a month to month.

They are however paying the old amount not the current month to month amount ($100 gap)

The current manager has only been managing it for two weeks.

The analysis has some wiggle room but how to I appropriately Guage the risk here?

Should I just assume two evictions into the analysis and hope for the best?

The seller doesn't want to approach the tenants for new leases or an estoppel agreement which is rather strange.

@Amanda Schneider

They need to repair it or make concessions.

You went under contract with a basement in good condition and that's no longer the case.

It's nobodies fault, but the condition changed in a significant way before you closed.

I would try to negotiate a concession for the issue in exchange for keeping the same closing date, just get it cleaned up asap and the repairs done after closing.

Just make sure to give yourself some wiggle room in the concession amount because of the increased risk your taking on.

@Idris Haroon

Start a spread sheet and what might happen if the market collapsed in a nightmare scenario.

If your property values tanked 30% and half your tennants stopped paying because it's the great depression 2.0, what's your play?

Which ones do you sell and take the loss, can you even sell or would you be underwater?

Do you have the cash reserves to survive a significant loss of income during a global pandemic?

Your only over leveraged if you have no well thought out contingency plan.

A good rule of thumb is that you should be able to survive 6 months if you lost all tennants income and your job while still paying the loans and maintenance. This necessitates expanding slower than most people would like but it helps to prevent your investments from collapsing.

@Katie Lamb

Don't bet on hyper inflation, economists don't fully understand inflation and what influences in larger economies yet. Economics is still half art and half science at this point.

I was just in a similar situation with a condo I owned, basically lost money with maintenance costs but had been appreciating like crazy.

Sold it and did a 1031 and it covered most of the 25% down payment on a 4 Plex that should cash flow very well after the renovation.

I view this a good on all fronts, just plain business sense and if inflation does happen I have way more exposure for it to be an advantage for me by having 4 units with rents that can go up and a larger asset that can appreciate.

@Noel Negusse

The incline district is definitely the epicenter of the improvement but even that is street to street at the moment, some are immaculate l, some are pretty run down. The further west you go in the incline district the worse it gets generally.

The only good neighborhood on the west side is Northside (ironic I know) so it wouldn't surprise me to see the incline district really pickup.

The incline district has some cool upscale wineries and bars starting to open up so it has real signs of life but it's early.

@Noel Negusse

East price hill is not a very good neighborhood.

It's got sections that are ok and changing but most of it is not good and is probably a D class neighborhood.

Western half of Cincinnati is very rough for the most part.

If it were me I would want much better than 9.5% CoCROI for price hill and even then I would probably want to wait and see the neighborhood change more before I jumped in.

I suggest using area vibes to get a good sense of the crime rates in various neighborhoods.