All Forum Posts by: Louis Leone

@Michael Ford 

Stuttgart is a great area (been there a long time ago doing work with Mercedes Benz).  An interesting fact about Germany is that it has one of the lowest rate of home ownership of all the developed countries (43% in 2013 compared to 60%+ in the US).  The reasons are pretty interesting.  Take a look at this article:  http://qz.com/167887/germany-has-one-of-the-worlds...

There are sites like www.expatica.com that help with buying property overseas including Germany, but I've never used them, so really can't vouch for it.

Living in Manhattan, I don't disagree with any of the points being mentioned.  Cost of living here is continually rising and has spread outwards throughout the boros.

Thanks for sharing.

@Vik C. 

I'm in Manhattan and I've pretty much decided to look out of the NYC area.  It's very hard to make rentals work in Manhattan especially so you have to rely on appreciation.  I'd rather assume no appreciation and rely on positive cash flow with appreciation being a bonus.

I'm currently working on a model to identify emerging real estate markets in the US that can provide decent cash flow with potential for appreciation.  Transaction costs are another negative in NYC, so you really have to get a great deal to make the numbers work.

@Account Closed 

I'm looking at coming up with a model for this right now.  I've been looking at different indicators, both macro and micro for housing markets to see what works best.  Some indicators definitely have higher correlations than others, but the key is to be able to catch the market at right part of the cycle.  Some markets are easier to determine what part of the cycle they are in, but others are a bit more challenging.

Usually, you're on to something if you can find markets that look promising but aren't in the lime light yet (e.g. they aren't known by everyone).  

Hi Jason,

Good to meet you.

@Account Closed @Roy N. 

I don't disagree with the points you're making. You would want to buy for what people are paying for that NOI (or lower). My only point is GRM isn't much better and definitely isn't the holy grail. All it tells you is how you compare based on a multiple of rent (it completely ignores all the variables I mentioned above), so different investors all buying at similar GRM can have vastly different profits even in similar areas.

@Sam Leon @Account Closed 

Not sure I follow what the issue is with using cap rate. Granted it takes a lot more due diligence to verify the NOI (you probably have to look at several years of expenses - which many times is not available) but if you have high confidence in the NOI, cap rate is fine.

The issue I see with using GRM in this case is that there isn't anything to compare it to. The property seems to be unique in the area. GRM can be helpful and is easy to calculate, but it's very similar to just looking at the revenue of a corporation to determine its value. It doesn't say anything about what your going to profit on your investment (i.e. it doesn't take into consideration vacancy, expenses, depreciation). By ignoring the other elements, you can bypass a property using a GRM calculation that could have actually been more profitable (operated more efficiently).

Best to use what you need to, based on what information is available.  One is not necessarily better than the other.

@Account Closed 

Something still feels a bit off.  The tax move seems like a bit of gaming.  Can you verify payments made by the sober living facility and what expenses they have been putting in.  Maybe confirm the lease specifics with them as well.  Calling the town and/or talking to neighbors may shed some light (even if it has to be over the phone).  

@Michaela G. 

We had designed one in a condo development - I think we called it a "Pet Spa" where a resident could wash/clean their dog and/or have a groomer use the facility for haircuts, cleaning etc.  People with dogs really liked it.

Maybe it can be either a mud room or doggie wash depending on whether the potential buyer has a dog or not.  It will definitely appeal to people with big dogs.

@James Wise 

Put me down for the 1st one.