All Forum Posts by: Rafael Norat

@Peter J Struck

Hey Peter! I would say a standard $1M Commercial Liability Coverage policy will cover you well. Look up Proper Insurance as they deal with STRs on a regular basis. Where is your unit? Just picked 1 up in St. Petersburg with a pool. Reach out when you can!

Rafael

Hey Melissa! Do you have a title company that you work with frequently? It would be best to have one to do a "soft pull" check before buying anything just to make sure, even at free and clear sales. Don't want to deal with any municipality back and forths EVER! Life is too short for that!

@Champ Leong

Hey Champ! Your numbers look pretty good. Great job! I'm assuming you are buying cash?

I personally would not do a 7 cap deal in AL. I would imagine it was at least a 9 cap a year or 2 ago before the market started to inflate. If there's a correction, your value will come down quite a bit. 

I would consider it only if you can rent it as a short term rental. That will get your cap back up to the 9 range.

Hope that helps and reach out any questions!

Rafael

@Bojan Rajkovic

Even at 4 units they may comp weigh more on what comparable sold price for as apposed to the rent roll. 

Who knows.. Maybe he wants it for himself, or just to speak a bit..

@Bojan Rajkovic

Hey Bojan and wow! What is your realtor saying? What are her comps showing? 

I'm assuming you're working with a lender as well? They ordered the appraisal and where given the same feedback? Cant' say I've experienced this one before. But, if you have multiple appraisers saying the same thing, there may be a substantial difference between the purchase price and the sale price. But, your realtor should be able to pick this out as well.

Not sure why they would turn down the work. Possibly more work for them in needed to provide justification as to why it doesn't meet the sale price? 

Best of success and keep us posted.

@Bobby Forsythe Hey Bobby. I should have some banks that can help. Reach out to me.

@Avi Burnbaum 

Hey Avi! I work with a couple in that area and surrounding counties. Reach out to me.

@Omari Heflin 

Hey Omari! With regards to value after renovations..

If you're performing rehab work, include this cost with the purchase price in your initial cap rate calculation.

If your increasing the NOI after purchase, update this number once complete.

To calculate your post value, you need to know the local market cap rate. Then use your cap rate equation with the local cap rate and new NOI to determine the purchase price. This is what your property would be worth. From, there, use the difference between this and your initial cost of purchase (including any rehab) to determine the equity you just gained.

Hope that helped!

Rafael

Hey Ryan! You're situation is very similar across the entire country. 

1) Most realtors are not investors and usually rely on appreciation as their main factor. Be patient and surround yourself with like-minded investors. 

2) Cash on Cash even in today's syndicate deals are positive, with syndicate deals being over inflated as well.

3) No. They most likely do not know any better and have a multitude of people itching to spend money..

Reach out to me and I'd be more than happy to give you my opinion in and out of state with regards to your investing goals.

Hey Andrew! Are you using direct mail at all? Obviously, high equity long-time owners give you the best opportunity to work out a seller finance deal. With the market nationwide being as hot as it is now, its much more challenging to find these opportunities. You can also look at mixed-use and larger 10+ unit transactions that may also be willing to offer seller financing in either 1st and 2nd positions to keep the deal moving as well. Hope that helps a bit. Ohio is a great market!