All Forum Posts by: Account Closed

 Some might say it represents the comparative income generating strength of an investment compared to its price. So the gross revenue generated by a rental property has nothing to do with whether or not property is financed.

Clearly you haven't reviewed the initial post. This isn't a cash flow only perspective but total profit which includes appreciation. In markets with extremely strong CFs and somewhat average appreciation, total profit does exceed LA's in some markets. If we start talking Detroit, now you really got yourself in trouble.

I hope this isn't where I get to explain or defend my RE or investment experience. But regarding some of your questions, the intriguing part is whether or not rent remains flat for the entire holding period or if an 8% vacancy rate is used, the primary investment objective is still intact and almost unaffected. 

Even if a 10, 15 or 20% down scenario, and use of conventional financing at 4.07%, the monthly cash flow is still positive. 

In LA however down payment would have to be almost 52% just to break even. The difference is materially profound. It is a fact you cannot ignore.

haha... I thought I had a disclaimer in there somewhere that this wasn't meant to hurt anyones feelings :)  LA want a rematch? 

Cool pics by the way. Not even close to the dance team though :) , like a few miles apart. There just seem to be quite a few attack dogs on here lately... maybe someone is upset with my post about airBNB. You sure you dont work for airBNB?

Seriously, where did you get the vacant building pics in Baltimore... looks like a gem for a value add project. Have an address for it?

According to census data -- there actually is more vacant buildings in LA: 93,375 than in Baltimore 54,598 but this wasnt what the post was about. Not trying to bash any city. Just need to park some funds where I can get best monthly positive cash flow. 

No matter how I tell you or anyone else not to take things personal -- it seems that is precisely what they do anyway.

@Alexander Monnin I should start answering some of your questions with a question.... So if we really have to get into the theory of things... there is a reason why you use the Cap Rate to evaluate rentals. Debt service is excluded on purpose and the NOI is utilized as the numerator. Want to guess why that is?

 Who told you to wait? Lets hope it wasn't the hard money lender. The taxi meter is running.  Your profit takes a hit with each day that passes.

The banks are typically well informed about market value.  If property is worth $400,000 and loan balance is only $125,000, they will deny any request to short sale the property at 31% of market value. They would have a very strong motive to let property go into foreclosure.

 Where exactly is the apartment located? Same thing with the SFRs.

AirBNB didn't just spring out last night. They have been violating all sorts of laws for several years; finally they are being sued. The landlord here happens to be a corporation whose interest airBNB infringes on... it would be irresponsible not to act. What is baffling is that it took this long for the lawsuit to come out.

I have no Idea why you are getting fined by the authorities in Philly... I can suspect however you have been giving them some sort of grief or violating local ordinances?   :)   so they start hitting you up with all these fines. Thats usually an easy fix -- don't violate local ordinances :)

It is like you said, you don't have the facts about airBNB -- I happen to be aware of what their problem is and how they can resolve it.  Going around suing every city to change their law is just not the way to go.

If I am correct, average home price in Beverly Hills is about $3,000,000. :) 

That isn't exactly an actively sought price point for a majority of renters. Not even close! Sure, owning a personal crib in Beverly Hills isn't too bad an idea, if you are thinking long term appreciation. Its just not a go to market for rental cash flow.

You are also correct, different areas have different strategies. Some markets are pure appreciation, some CF and some both. Think of it this way...if you really like the value add route, you can still do that in a market with strong CF potential. Nothing stops you from buying a value ad rental project in say Baltimore for instance.

Regarding investing out of state, sometimes it is unavoidable. If I happen to live in a market where the prevailing cap rate is 2 or 3% and I feel rental income should be a reasonably sizeable part of my investment strategy, then I will buy in markets with a slightly higher cap to achieve rental income objective. 

You sometimes wont always find abnormal appreciation and cash flow rates in the same market.