All Forum Posts by: Michael Le

Trend is more studio/1BR than 2BR/3BR. But you'll need to survey your area and maybe even get a feasibility study.

To an extent you will be paying for the potential. That's just the reality of this tight Seller's market. How much of that potential (that you will have to work hard to execute) will you be willing to give up now to the Seller is up to you. But in this current market you won't likely win any deal paying for exactly how the property is currently operating.

That is correct with the caveat that current value is not necessarily what people will pay for it, if that makes any sense. It's the current value if you don't plan to make any changes to the property or how it is currently operated. If there is opportunity to improve on both then many people will pay for that potential. Basic example is if you have an empty building with zero NOI, that does not mean that building has zero value. Even if you leased it up to 50% occupancy it is generating much more income, so the value is basically what someone is willing to pre-pay now for the work they will eventually have to do to later to get it occupied and operating better.

It depends on what your goals are. If you want hands off real estate then you should look into investing in triple net lease properties or as a passive investor in someone else's syndication. If you want to do it yourself but not too much work then you can look for higher quality, stabilized properties. You will still need to asset manage the properties but not likely as much work. The returns will likely be lower too as they're more yield play strategies.

You can use Sketchup. There is a free version too.

 I'll be at BEC but I didn't mention it because Joe has an educational program he sells. The MFIN guys do not.

Come to the MFIN conference in Houston on Feb 8th.

There is a revitalization effort underway in Stop 6. Whether it is successful or not is to be seen. But you did ask for up and coming and not already come along. So there could be upside for sure.

A 9% cap rate would be unbelievable in a good neighborhood. Unfortunately that is not how the cap rate is calculated. It uses the NOI and not total income. So using a rough guess of 50% operating expense, you're left with $180k NOI and a 4.5% cap rate. Is that good? You have to decide. Is that the prevailing market cap rate? Check with a local broker.

You don't necessarily have to put a down payment to the lender if there is enough equity but you will likely have to cut a check to the Seller for the difference between loan amount and the sale price of the property.