All Forum Posts by: Jude Campbell

Hi Anthony.

The value of your portfolio is based on what the highest bidder would pay for it, so this could be FMV, or it could be derived from an income approach, though, FMV and highest bidder are one and the same IMO.

Having income models is great to justify FMV but marking up the value of an asset beyond the valuation the market would peg to it is not what I'd consider a fair and honest dealing between you and your partner.

In a portfolio with this many assets, you might want to consider doing a net asset valuation (NAV).

Happy to help if you have any questions!

Jude

Hi Michael.  I like the Bible Belt & the Midwest for assets with strong cash flow.  I'd stay away from the west coast states and, budget dependent, the northeastern states. 

In general, you can find good yield anywhere you look, so the answer is to just keep digging until you find something that fits your investment criteria. 

Good luck. 

My advice: 

If you really think you can get $225k for the property after the flip, I'd say that's a good return. 

Go ahead with the flip, bring in tenants before you list so it's more marketable, then list the property for $225k.  Since you'd likely be getting enough in rent to pay your bills, there's no rush to sell.  If someone wants it at your list price, great, and if not, you have time.

Let me know if you have any questions! 

Hey Christopher!

Getting approved for a real estate loan with a newly formed LLC is tricky. Lenders typically look for a track record of income and good credit history when approving loans, which new LLCs just don't have.

That said, there're a few ways to get around it: for example, if your personal credit score is good, lenders will consider it and you might be able to personally guarantee the loan.  

In some instances, lenders will consider prospective income on a property as a means to lend but this is more easily obtained as a reputable investor. 

Sounds like a good way of connecting retail to better deals. 

I wouldn't consider myself strictly a yield investor, but like any investment, there has to be some grounding in the basics: PV of future cash flows. 

Anyway, if it's not proprietary, I'd be interested in checking it out.  I'll send you an invite. 

Institutional, Wall Street-er, if you will, here. 

Mass market analysis is alright for a preliminary search to vet properties but scouring the market is arguably just as quick and effective once you get good at it.

Knowing how to search on Zillow or Realtor is already going to discredit 90%+ of places, then a two second look at a listing will discredit another 90%+, meaning the cream of the crop will rise in a matter of minutes, regardless of how you're searching when you equip yourself with the right tools.

Here's my beef with mass market: it's good but it misses things. Let's say the software uses the equivalent of Zillow's Zestimate to forecast rental revenue & expenses, they're off by ~10%+ - fine, it's a good start. It's not good enough to give investors important fundamentals: how CAPEX will affect IRR, terminal cap rates (TCR), area growth, crime, actual figures for vacancy, absorption, expenses, etc.

Not to mention that you're unequivocally not going to find every on- and off-market listing on mass market or a search engine like Mashvisor. 

Tried and tested, my greatest deals have been found directly from the source in which they've been listed, with conviction and fast action.  That said, there's value to be found everywhere!  Happy hunting.

Congrats!  Hope it works & myself and the BP community are here to help with anything you might need!

It might work but it sounds like between seller financing and bringing in an equity partner, you might be overextending your leverage a bit.

You'd need to have certainty in consistent cash flow and ability to service all forms of financing.  It gets complex when looking for many forms of debt and equity.  

Send me a message if you have any further questions!

There are many ways of getting into real estate investments.  

The main thing you'll want to consider is the cost of borrowing on your heloc and make sure you'll be able to service the debt and front the development costs of your new property concurrently.  

On the flip side, you can look into other forms of rentals, long- and short-term.  If you look hard enough, you can find value just about anywhere!

Hope this helps. 

Hey Dalia! 

It's tough to predict variance in appreciation between two areas that have similar characteristics and are so close together.  They're both on city boundaries so value appreciation has to do with both population growth and urban sprawl but should be pretty similar.  Rental demand in both areas would be strong, so I wouldn't worry about your ability to find a tenant. 

My worry is that if you decide to rent either place, your cash flow might be tight based on average rental rates in Fresno, relative to the value of the home.