All Forum Posts by: Mark H. Porter

Cash is king!  It’s much harder than 1 year ago due to debt service but it’s still a priority.

There is no longer a baseline on insurance.  Mine just doubled from last year due to the disasters the nation has faced.

Maintenance and repairs (these are not separate items) 5% of gross but it would be lower if you are buying a class A or B.

CAPEX 2% of gross

Management fees on a SFH 10% of gross. Short-term rental could go as high as 20%.

I cant speak of this as the norm but I installed a charger in in my oceanfront house in North Myrtle Beach two years ago and it’s been used once. 

But the cash-flow, which is a result of the NOI minus debt minus CAPEX, directly relates to cap rate. Higher NOI will create higher cash flows which, given the same cap rate as you started with, gives you higher appreciation.

I agree with Henry.  I have never done a deal in 26 years that didn’t cash flow.  And I’ve never bought a cash flow by putting more down to get there.

I have a GREAT, I mean GREAT commercial broker who works directly with my banker to qualify properties before my decision is made.  They insure i make a cash flow to meet my needs as well as anything the property requires.

Don’t let anyone tell you different.  It’s all about that cash in your pocket at the end of each month after all the bills, including debt, is paid.

I had 6 properties and 22 units before I did my first LLC. Not only was it far cheaper to carry an umbrella policy but it was easier to refinance if it wasn't in an LLC.

I’ve done quite a few costsegs and got me it has only made sense if the property is over $2M.

I’ve used @Dave Foster for all my 1031’s

You really can’t do anything without at least an 8-cap if you are financing.  As you get higher in sale numbers (>$3M) you demand an even higher cap.

Don't bel surprised with rates over 8% and LTV's less than 70%. Many banks are cash poor and even demanding money market deposits for the 5-year term.

I’ve done ten 1031’s and in every single case I had signed agreements, but no due diligence completed, by the uplegs prior to the closing of the downleg. Then I had 45-days to choose which ones I was buying and complete the due diligence.

As Jeff said, talk to your tax professional.  Not every property is a candidate.

I don’t order CostSegs on any properties valued at less than $2M.  I’ve done thirteen 1031’s so some of my existing properties are three generations deep in deferment.. It gets complicated.