All Forum Posts by: Reed Rickenbach

Memphis' A & B areas are similar to Chattanooga & Knoxville's in the sense that your rent will be 1%> of purchase price. You are asking for B+ areas with cashflow. In a lot of markets (Memphis included) those two are mutually exclusive. 

As @Adrienne Green pointed out, a lot of investors come to Memphis to find cashflow in the C areas. Memphis has more C areas to offer than Chattanooga & Knoxville, that's why. 

The cashflow spectrum between A, B & C areas exists in every market - higher the class lower the cashflow. 

Raise more equity. Call more lenders. Buy better deals. Wait. 

It just depends how high rates go and how long they stay there. Could be kind of ugly, could be very ugly. 

I like to keep in mind that the sophisticated operators most likely bought rate caps and had extensions built into their original terms. Probably stands for less than 50% of the current loans, though. Multi-decade operators know how to protect themselves. They probably have the fund/client relationships to call capital as well.  

I agree with you that there will be a big crunch and it could get ugly. I think it could play out several different ways which could leave several different parties "holding the bag" depending on when/how the music stops. 

If there is no prior relationship with the bank, you'll likely be facing an NOI/Cap Rate valuation - mainly focused on DSCR. And rightfully so.

I have seen instances where the borrower had a strong financial position and used retail appraisals for their cash-out refinance. 

Most likely for a portfolio loan, your asset's ability to cover debt service will be the main focus. Probably 1.2 - 1.25x for DSCR.

Outside of inflation & rates, of the things that could still "harm" you, you have: Taxes, insurance, political climate, maturing debt, asset class diversification, geographical diversification. 

You were smart enough to get here so I'm sure you'll be smart enough to keep it. If you're keeping up with market rents & comfortable with the locations, you should be more than fine I'd imagine. Congrats on the success!

So monthly gross rent is $9,000 and your purchase price is $625k? With only $20-40k needed? At first glance that seems like a great deal. 

I'd be happy he offered the $7,500 and close assuming everything else checks out.  

 His account posts auto-generated messages every day and posts them on every forum. It's basically a robot. 

 A couple hundred deals before you can invest $800k?! 

Is this chat GPT? Would be surprised if not. 

Great job. Awesome.