All Forum Posts by: Lee Ripma

@Travis Mullenix

VestMap.com isn't free but it's worth every penny. 

@Jeremy York

Looks like a lot of the area would still be considered rural (under 500 people per square mile) but certainly some growth and demand. 

Low caps cut both ways - high value on the purchase but also high value on the exit. I invest in RE in LA where with buy and hold you'll never get the kind of cash on cash returns you'll get in cash flow markets, but done right your IRR will be much higher. I've done several types of novel fix and flips (completed projects in my BP profile). So I think you can certainly do well paying more for small MF on the west coast with tons of demand and very low supply. I think the hardest thing to navigate is actually tenant's rights and local restrictions so make sure you really understand what you are dealing with on that front before you start. The best risk reward I have personally found is on stabilized value add MF in growing midwest markets. Don't drink the cash flow kool-aid though, you can certainly invest and be successful in high priced markets.

@Jordi Valado

What you are really after is a growing affordable market. Avoid affordable markets that are not growing. You actually don't have as many choices as you might think. Go down this list of 38 markets. Figure out what you asset class will be, which of these markets has a lot of your target asset? Narrow down from there. Texas is brutal on property taxes but also has a lot of growth. I personally invest in LA and Kansas City. You can find the right submarket within any of these markets that will meet your needs and you'll be able to build a team there. 

• Phoenix, AZ
• Tuscan, AZ
• San Antonio, TX
• Austin, TX
• Huston, TX
• Dallas/Ft. Worth, TX
• Oklahoma City, OK
• Tulsa, OK
• Kansas City, MO-KS
• St. Louis, MO
• Indianapolis, IN
• Milwaukee, WI
• Chicago, IL, WI, and IN
• Grand Rapids, MI
• Detroit, MI
• Minneapolis, MN
• Cleveland, OH
• Columbus, OH
• Cincinnati, OH
• Louisville, KY
• Nashville, TN
• Memphis, TN
• Birmingham, AL
• Atlanta, GA
• Charlotte, SC
• Raleigh-Durham, NC
• Virginia Beach, VA
• Richmond, VA
• Baltimore, MA
• Wilmington, NC
• Pittsburgh, PA
• Philadelphia, PA
• Hartford, CT
• Providence, RI

Good luck and go get after it! 

@Emma S Endicott

Cash flow = risk. Why are you getting an 18 cap? To take on a ton of risk. So just understand locations that you are investing in. What you really want is affordable GROWING markets that cashflow not the most cash flow possible. Looks like this is on the border of some growth but keep in mind that Cleveland cash flows well because the population in a lot of places is declining. 

The growth map to give you an idea. 

Let me start off by saying this is not legal advice nor insurance coverage advice, I'll just tell you what I do as a MF investor. There are replacement cost (RC) policies and actual cash value (ACV) policies, also a lot of add ons for extra coverage. If your goal is to have great insurance that costs a lot - congrats there are lots of folks ready to sell you that and tell you how great it is. If you want to save money then look at ACV policies and high deductibles. I personally put ACV policies on my properties and require my tenants have renters insurance. My justification is that complete loss is uncommon and premiums are certain. I am well capitalized enough to take this risk or to self insure this risk. People who sell insurance will tell you ACV policies are crazy but I set my limits so that if the building burned down I could pay off the bank, get the money I have in, and sell the lot with a break even or a small gain. There are risks with ACV policies, so if you use them, make sure you understand how they could cost you a lot out of pocket. 

Looks like the center of town really has the lowest income and the highest growth. I have never been to the market but I usually target areas with high forecasted growth and high forecasted median incomes. 18503 and 18510 would be my target zip codes if I were to invest in Scranton. 

I agree with what others have said, you should be able to get through your DD in 21 days and then close 30 days after. Maybe 30 and 30 at a max. Anything longer than 60 days you should be putting up extra EMD that is applicable to purchase price but non-refundable. Sounds like you're doing that. I look side-eyed at anyone who says they can't close in 60 days.

@Ethan Lahav

Checkout VestMap.com you can use it to vet any location in the US. 

@Jeff Wheater

This is not legal advice, just what I personally do. I always do algorithm based cost segregation studies - even on small properties. These usually cost me $600-$1200 depending on the property size and I benefit from the passive losses. Feel free to reach out for the companies I recommend.