All Forum Posts by: Robert Rixer

Sorry to hear about your situation. From a pure decency perspective, it's unforgivable for sponsors to not communicate to their investors. Deals carry risk and you can't always control a deal taking a bad turn. But you can control how you carry yourself. Going dark on investors is just about the worst thing you can do.

It's definitely on the higher side. Shop around or go to a mortgage broker.

Have you considered taking on a property manager? It sounds like you're willing to sacrifice some serious cashflow in order to be closer to home. I'm of the opinion, if you have a good thing going, don't mess with it!

Seller financing is one of the most common way people buy properties with limited cash. You're unlikely to get a good deal tho, typically a seller uses seller financing as an incentive to get a higher purchase price.

What is the reason behind wanting to build new versus purchase existing? Typically land costs will decide whether it's feasible to build new. Construction obviously varies but roughly you could use $150-250/SF, until you talk to a local contractor. Right now in most markets across the US, it's tough to make a new development like this pencil out. But in the long term you're almost guaranteed to come out ahead.

A larger multifamily build would generally be more cost efficient as you have less exterior footage and can combine MEP systems. Being able to phase the duplexes is a nice advantage however. I would say take a deeper dive into the nearby product and see if there is a premium in rents for a duplex unit versus an apartment.

What could a bank statement from November 2021 show that would materially alter the deal? This is where it's important to think critically. Too many new investors blindly copy due diligence checklists from the internet, assign equal importance to each item and blow up deals over nothing.

The market will naturally balance itself. "Good" areas will be priced high, "Bad" areas will be priced low. I think what you're really asking is how to identify good value areas where rents may be trending upward but the prices still remain relatively lower.

An important metric is tenant household income to rent ratio. Even if rents are trending up, if your tenant base can't make ends meet, the asset won't perform.

Not a B&B investor but the rule of thumb is make sure it works as a regular rental first, then everything beyond that is gravy.

Thanks for the post. This is the kind of insight that makes this forum so valuable.