All Forum Posts by: Luke Grogan
Luke Grogan has started 18 posts and replied 131 times.
Post: Lender in Tampa Florida that allows subordinate financing

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Give GTE Financial a call. I know for a fact that they do, but it has to meet DSCR of min 1.25 and I think HomeBanc does also. There are a few others that will, but I'd have to go through my notes. Nick Satel is at GTE and David Darnell is at HomeBanc. Use my name with David, but Nick won't remember me.
Post: Paradigm Life, Infinite Banking, Whole Life Insurance

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: What's better...9%ROI w/ 24%CCR or... 7%ROI w/ 50%CCR

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: Would you go with a 6 CAP NNN or 8 CAP B+ MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: Would you go with a 6 CAP NNN or 8 CAP B+ MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
I appreciate the comments. I agree that 8 CAP MF is difficult, but they are out there and my underwriting is more conservative than brokers! While I'll always make an incorrect estimation on expenses, I work hard to make sure I'm over estimating and not underestimating, but true replacement reserves and CapEx is hard to estimate. Likewise, rising costs associated with both SFR and MF is hard to model as well, but we do know costs go up.
I'm looking for relatively safe cashflow, so it's probably a combination of wealth preservation with an inflation protected asset and inflation protected cashflow, and growing my cashflow. I did this with SFR as we came out of the bottom and it's increasingly difficult for me to find a good rental without a lot of work to get them rent ready and then the rental rate vs total investment is around 8% or less.
This has led me to look more closely at MF, which with a back of the envelope 50% costs vs potential rent, there are some good B class MF assets. The problem I see is the potential for higher tenant turnover and the cost of turning a unit and lost rent can be tough to estimate correctly. The places I'm looking at are older, so 10% repairs, 8% vacancy and 3% replacement reserves is just an estimation and I've been around long enough to know that when you start fixing issues in older buildings, they seem to get bigger as you go...
Good points on the dirt under the asset. This particular deal is a single tenant, national chain quick serve restaurant. It's got a good track record in this location, but if/when it becomes vacant, there will be some challenges to finding the next standalone tenant.
Joel, I appreciate the offer to chat on the phone. I'll take you up on it after I put a little more effort into DD on this place specifically.
Post: Would you take a 6 CAP triple net or 6 CAP MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
@Marc C. Hey Marc, not sure I understand the question. The BET cashflow (before tax?) is $4,700/mo which makes it a 6 CAP on purchase price. I'm assuming "a couple hundred per month" in expenses for NNN, but I'm just at the start of really doing any DD and this is the first commercial property I'm digging into. Without getting it under contract, they won't share tax filings or monthly cashflow/expenses or the lease terms. I understand it, but just not sure I want to put it under contract until I know a little more about NNN and if it isn't he best way for relatively low involvement, protected cash flow.
I'm staying away from fundrise and REITs at the moment. I can also get solid, 7%+ returns with a couple of oil and gas companies and bet on rising energy prices, but I'm separating stocks, REITs, and notes from real assets that I'm purchasing. I've got one good pool of capital to put to work for my second round of major purchases and trying to make sure I am looking at it correctly for cashflow and moderate downside risk.
Post: Would you take a 6 CAP triple net or 6 CAP MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: Would you take a 6 CAP triple net or 6 CAP MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: Would you go with a 6 CAP NNN or 8 CAP B+ MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59
Post: Would you take a 6 CAP triple net or 6 CAP MF?

- Investor
- Cocoa Beach, FL
- Posts 132
- Votes 59