All Forum Posts by: Will F.

Will F. has started 175 posts and replied 907 times.

I have been investing in Abq for 6 years, and have owned 6 different properties, from 4 plexes to a 38 unit apartment complex.
Abq has seen a lot of rent growth this past year, so it’s a great market to invest in. At the same time, apartments are expensive and the competition among buyers is high. You need to be careful about the area you invest in. The city has some challenging neighborhoods. Especially east of the Fairgrounds.
Feel free to DM me and we can connect further to talk about the market.

Hi what neighborhoods should be avoided as far as investing in apartments in ABQ?

0 Votes

Albuquerque, New Mexico

Quote from @Carlos Ptriawan:

Hi Will, your calculation is little bit inaccurate. Your market is following bay area lot. This is real affordability example okay. Most people by average uses 10-15%down. And by average they use 40-45% of their monthly income to pay mortgage. In Bay area it's extremely extremely common for husband and wife working in tech. Starting salary lets say 130k, so it's common for household to make at least 300k, it's middle class income. With that calculation they could easily afford $8-9k mortgage. Now, 900k homes translates to 800k mortgage, 800k mortgage is "only" $4k something, it's easily affordable by husband and wife working in tech. My painter and my USPS worker also few years ago buying 1 mil house. SO from your number, the 1% may be actually 20%. There're still lot of families that could afford it as long as the basic wage support such configuration.

But you also have good point, in the environment where the interest rate is 6%, you need to buy investment that yield 2% above that or 8% which is only available in Ohio LOL :)

Oops yeah i see that my point was a bit off. Thanks for pointing it out

but lets say I meant a 900k loan. Most upper-middle homes are in the 1.2-1.3m range

at a 9% rate would be 81k in just interest-- not principal payment/ prop tax/ insurance

I was making the point that if rates went up to those rates it would be high interest pay.

Quick math i just put in mortgage calculator at 9% would be 8500$ payments if you include prop tax and insurance

It's just expensive and it's due to low interest rates largely in the 2.5-3.5 ranges. Now we're i the 5s and if it gets to that 8-9% rate it could have a pretty big affect on RE

1 Vote

Dallas, Texas

Looking for a PM that does small multifamily around downtown LA

Or does anyone recommend a property manager whos seasoned with LA city RSO and rent controlled property? That are good with experience with scep and lahda etc

I'm about to pick up an 8 unit small MF near downtown

0 Votes

Los Angeles County, California

Quote from @Larry Zucker:

The thing is that 6% is still on the lower side of historical rates and inventory is still very low. So, unless inventory increases dramatically or the unemployment rate soars (forcing people to sell quickly), the housing market will not quickly and dramatically move downward - i.e., crash. That's my opinion anyways.

I don't anticipate a crash either due to the amount of equity, and money still in the system. Affordability is not sustainable without rates being low ( under 6%) ...

The problem I see is that the monthly cost of holding real estate with a loan is at all time highs. It doesn't matter if the loan is at 4-5-6% but if the price of property is so high. For instance $900k for a decent home in LA monthly payments become so high that only 1% of people can afford it.

If rates went up to normal levels like high 7s to 9s then how would people make $81k interest payments a year on a $900k house.

So to me there should be a correction at some point.

Basically why would you buy a property at a 4 cap when interest rates are at a 6 cap?

But there's also costs of building going up and inflation which should actually make housing values go up ...so again ...its hard to say

1 Vote

Dallas, Texas

Quote from @Larry Zucker:

Quote from @Greg R.:

Quote from @Larry Zucker:

The market is not crashing. The current market is very different from 2008 when inventory flooded the market as people could no longer afford their mortgages. Inventory levels alone tell that picture. In the raleigh, NC market, Year over year (YOY), July 2022 saw the number of listings increase by a modest 1% with a sale-to-list of 101.7% (down from 105%) and median sale prices are up 18% YOY. While Average days on market have increased 33.3% as interest rates have forced some buyers out of the market, that comparison can be deceiving since the comparison is between 9 days on market last year to 12 days on market this year - historic lows numbers.

The current market changes are the start of balancing and normalization, not a crash. Keep an eye on that inventory. If it skyrockets - which I don't think it will because of solid homeowner equity - then the discussion about a crash may be relevant. But for now, it is not.

@Greg R. - Don't buy into the fear mongers that are promoting a market crash to improve their ratings, likes and reach. You asked for data, and I provided it above. Now rest easy. From an investor perspective, demand for rentals go up whether there is low inventory (people can't find/afford a home) or a market crash (high inventory created by sellers who now need a place to live) so your cash flow numbers should improve in this market either way.

Hi Miles, I agree - the market is currently not in a crash. However, many economic markers indicate that's where we're heading. To your point, certain markets are going to be hit harder than others. And trust me, I'm not listening to social media gurus. Nor am I fearful about it - I'm simply preparing for the scenario as I believe it's the most likely outcome. When it happens I am not going to be surprised/ flat footed.

Your original post asked for data. I provided some, have you?. The inventory is at historic lows there is no getting around that. Inventory would have to quadruple to get the months-of-inventory up to 6 months. Very unlikely to happen. Interest rates, while on the rise, continue to be at historic lows. As the saying goes: "None are so blind as will not see."

Larry I agree with all your points.

But also wouldn't you say most of the properties priced in the last year or so will not make sense at 6%+ rates.

My fear is that affordability is at a low for decades. Property is unaffordable when taking out loans for most home buyers and many investors. Both prices (RE value) is relatively high and rates are increasing. Costs to hold don't make sense with high LTV loans.

I'm currently buying a multifamily 8-20 u and having to put 40-50% down to get a 6% APR loan to work. DSCR ratio makes many deals not make sense on paper...

Either way I'll continue buying but with more downpay and with more caution for the next year or so

1 Vote

Dallas, Texas

Hey let me know I'm interested in BH

0 Votes

Quote from @Chisom O.:

Hello BP Community!

I own a recently renovated duplex in the DTLA/Westlake area and I have been searching for a local property management company with experience in lower-income, multi-unit zoned neighborhoods. I self-managed for a year but am now unable to due to circumstances. I am looking for a service that markets, leases and fills vacancies but also ensure that unit is well mainted. They would also need to deal with tenant requests. I have searched high and low for services (Doorstead, Craigslist) but it seems no one is offering that level of service, or if they do I don't trust they can deliver considering my specific needs (experience with potential section 8 type community) in an increasingly gentrifying part of town. Does anyone have any suggestions for the LA area or ways they went about securing a property manager that offers full white-glove service?

Thanks for the help.

@Shiva Bhaskar

Hello Chisom did you find someone?

I'm also actually looking for a PM to manage 5-9 unit properties in

East side Los Angeles --Boyle Heights, El Sereno areas.

So theyd also have to be familiar with Rent stabilization ordinance (LAHD rent control) and keeping up with SCEP inspections from LA city

2 Votes

Los Angeles County, California

Quote from @Bill B.:

Ask key property Managment if they deal with those kind of properties. They've been great with A/B SFR.

Thanks Bill I have seen Key PM as a big local PM there i'll try them

1 Vote

Las Vegas, Nevada

Hi I was wondering if anyone knows of good property managers who deal w ith 4-20 unit properties in Las Vegas? and particularly Henderson.

That are OK dealing with C or above properties but also manage B

I'm trying to buy something in that range right now and wanted to get some local knowledge.

It seems like there's not a lot of inventory for small multifamily in Las Vegas or Henderson.

0 Votes

Las Vegas, Nevada

Quote from @Raymond Wu:

House hacking especially with low mortgage payments is the ultimate way to make huge IRR returns. Way more than doing a normal flip or a buy and hold.

and if you live in units 2/5 years you can save 100% of capital gains on 250k gain for single and 500k for married.

nothing can beat those returns when you consider taxes as well and if you put in effort and sweat equity while living there

i did house hacking to spur my more passive oos and apartment investing. Over long periods of time returns are tremendous.

it’s immeasurable compared to other types of investing but yes there can be headaches

I myself am looking for 4-20 unit properties in Las Vegas and Henderson I’m actually in escrow on a 6 u and coming in town to view on sunday

also I wouldn’t recommend house hacking rooms unless you are very systematized and are good at dealing w people but there can be some real headaches from that like if a roommate stops paying, fights w roommates or steals etc who knows

0 Votes

Las Vegas, Nevada

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All Forum Posts by: Will F.

Will F. has started 175 posts and replied 907 times.

Post: Looking to purchase small multi-family in ABQ from out of state

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