All Forum Posts by: Rob Beardsley

I would be honest! Screen your tenants real well and you should have none of those problems.

30K with 1600 in rent! nice!!

@Account Closed You never fail to come with the advice and the not so subtle!

Sounds like you have to get the eviction court involved. This can be a slow, arduous process. But this could be just a barrier to entry into this investment that has scared many away, leaving you with a great opportunity. 

For long term partnerships. Without you putting in any capital, you should ask for 25 to 50% of the capital gains of the project upon sale. As for cash flow you should negotiate a preferred return and anything above that rate of return (cash on cash), you will get 25 to 50% of the cash flow. Cheers.

I think now is a fine time to buy. I would be more focused on whether or not the deal is any good. If you can find a deal that makes sense which is extremely difficult to find in the Bay Area then I would go for it. Google and Apple activity in the South Bay is raising prices like crazy! Try your best not to bank on appreciation even though I would agree that the Bay Area is a very safe bet. Remember: cash is trash, cash flow is king! Good luck

Hey Alex, looks like a great project! I think its a great idea to wait until spring to hit the market. Did you pay all cash for the deal?

Hey,

First, I believe you should underwrite expenses a little more conservatively (50-55% of income). Next, use any blend of financing that will allow you to put the least amount of money down. If that means using both a bank and seller financing then do that. You may need to offer a lower purchase price based on your new calculations if you factor in higher expenses. Make sure to get an inspection and use that as leverage to negotiate a lower price if some deferred maintenance is uncovered. Sounds like you're in a great place - get that confidence! Good luck!

@Bart H. I am less familiar with balloon payments and refinancing risks. Can you explain this to me?

Thanks

@Bart H. I agree with all of that especially the idea that properties renting in the low $1,000s are safer while class A is overbuilt. However, I think you are underestimating the cultural shift in America. The Millennials started a trend of wanting to live in big cities in apartments. I don't think this will change for the next 20 years. 

Another valid point is interest rate risk. Interest rate risk is one of the major macro concerns in almost all yield investments. However, I don't see how the FED could raise rates substantially any time soon. Even if the FED were to raise rates 100 basis points, I don't see that affecting cap rates much in terms of decompression.