All Forum Posts by: Account Closed

That is what the community is here for. Sharing ideas and advice so we all learn and grow.

Oh, and make some money doing better deals.

John Corey

You said you are buying a multi-family building. You did not say how big it will be.

You also did not mention what sort of experience you have with RE.

1. A 1-4 unit building is not even considered a true multi-family commercial property. It will be priced based on someone could buy plus live there and call it their primary residence.

2. A 5 or more unit building is commercial. Its pricing is based on the income stream after expenses (NOI)

3. Resident managers only make sense when the building is sufficiently large enough to justify the costs of such a person. In a larger facility the tenants will pay higher rents if the resident manager is there (helps make their lives easier).

4. What is the logic for buying a building and then moving overseas? You can invest in REIT shares which have no hassle. You can buy other forms of real estate. You can buy into a TIC if you want direct ownership without the management. You can partner with someone.

There will be costs and hassle so there has to be a benefit that you really can not get another way.

Note that I live in the UK and own multiple properties in the US. I have done so for something like 14 years. No multi-family buildings but a portfolio of rentals. Hence I have a bit of experience with what you are attempting to do when it comes to remote management. I also have rentals in the UK plus made offers to buy in other countries that are even further away.

If you want you can answer some of the above as an email or PM.

John Corey

As you noted there are some factors that impact the condo value that do not apply to SFR. The reverse is true also.

I have done very well with a number of condos. I have seen other deals not work out.

If you are buying to hold long term be sure you can afford to and that the location makes sense. The HOA is critical to any shared ownership situation. Do they have a sinking fund and what has happened in the past? Was the building a conversion or purpose built as that will impact future repairs.

FL has some weather issues. Are the properties you are looking at any worse off or better off when it comes to weather and insurance?

What is the ownership mix (age, rental vs. owner occupied, concentration of ownership with a small number of parties)?

After you work through all the details that are specific to condos it really then comes down to location and other lifestyle factors. If you have a great view unit in a good location on the property with all the pools and other things it will remain in demand. A premium unit means you can get out quicker when it comes time to sell. People in the complex might even want to trade up. I sold one recently where the demand for my unit was higher than for others as that one unit had features that no other unit in the complex had. You pay more on the way in but you have a smoother exit when you eventually sell. You also enjoy the extras in the mean time.

As you are talking retirement let me put a bit of a bug in your ear.

You can use your IRA to buy the condo. You can even get a loan if you want but the LTV will be pretty conservative with few lenders offering loans to IRAs. I am not saying that an IRA is best. Just that you can and most people do not realize this. The IRA has to have the ability to deal with future costs, etc.

John Corey

If you are looking to buy, refurbish and then sell you need the buy price to be at least 30% or more.

Standard formula says:

((ARV * 70%) - (all buying costs + all holding costs + all selling costs + all repair costs + contingency)) is the maximum you can pay and consistently make a profit. Stuff happens so costs run over. You also might find more deals than you can fund so by staying at 70% or less a hard money loan becomes possible (not always the right idea but possible).

Most agents do not deal with investors and therefore do not know about much other than retail deals with retail buyers. Hence they many times do not know how to work with investors.

The agent could also be telling you that the present market is worse than you are thinking so your hold costs could be an issue. Hard to say given the info posted so far.

At some level forget what agents tell you good or bad unless they are working your market. Most agents that I run into do not own investment property so they have no clue. Nice people, able to manage the paperwork, clueless on what investors care about.

Agents who also invest and work with multiple other investors are diamonds. Keep them close.

John Corey

Great suggestion.

Granted most places just show the price at which the transaction took place. I wonder why TX feels there is much of an advantage to keeping the sale price private? I take it that if the deal was all cash there would not be much in the records in TX.

John Corey

tessvis,

:welcome:

Find a forum that fits the deal you want to talk about. Post your questions there. It would be nice to put a brief reply here after you have done so. That way people can find the questions you posted and offer advice if they have something to day.

Good luck,
John Corey

:welcome:

Good to see another RE investor who has a track record.

Sawdust in the morning... Reminds me of a movie where the actor appeared to be talking about burning down junkers rather than rehab work. :lol:

John Corey

Derek,

:welcome:

Assuming you are 18, focus on establishing an income and credit.

The credit takes time to build. Better to start now and let time be on your side later. Nothing fancy. You need 3-5 accounts to be open. I am not saying to load up on debt. Just to start with some accounts that make sense.

Pay your bills on time or early all the time.

Regular income goes a long way to building your ability to finance deals. Even a brainless job that shows consistency in your field is good. Better might be something that pays the bills but exposes you to RE (construction, office work for a company in the field).

At some level assume that a sales job might be great training for life but a real negative for credit. The variable income is not something lenders like. If you like sales go for it and expect issues on the financing side.

John Corey

:welcome:

You have been busy given all the degrees.

Enjoy the site.

John Corey

It would be best if you provide more context.

Size of loan, type of property, how long you expect to keep the loan in place, are you making assumptions about monthly payments, LTV and how you expect the LTV to be tested (as-is value or ARV).

Many can help. How many can get the deal done is unclear given how little is known about the deal.

John Corey