All Forum Posts by: Robert Lorenz

@Brian Adams why does it matter if it's off-market? If it's in a tertiary market that no one is watching, that happens to have 5% vacancy rate and 4% unemployment  (the market not the property) isn't that good enough? 

I'm looking at a 450 unit property in an area I like, offered at 7.9% cap. 2.1 mil NOI, comes out to 26.5 mil. 20% down= 5.3 mil

debt service on a loan that size runs, at 5.5% 30 year, around 117k, leaving only 40-50k cashflow per month. That TANKS the COCR, so who is paying 5.3 mil for 40k-50k cash per month, especially if it's split up between multiple partners? I understand there will be an upside down the road as rent grows, or if the property can be aquired at a higher cap, or if rents can be forced up... but is this really the norm that an investor or potential syndicator can expect?

I have a great inspector that mostly serves the west valley, but if you'd like to give him a ring I'm sure he can at the very least provide a referral. I'll PM his contact info :)

PS unless your agent gives you a list of choices to choose from, avoid using anyone they recommend. You are free to (and should!) shop for everything from inspector, lender, title company, etc. I wish I had known this when I bought my home, and came to regret it later. Good luck!

Ok got a potential live-in deal that works on paper but the BP rental calc says it's no-go.

4 3/2 1070sqft each rents @780/mo tenant pays bills

HOA pays water and covers landscaping $600/mo (in an apartment-like community)

units include appliances w/ washer & dryer, and all have new water heaters. 2 units have been rehabbed, 2 have not but are livable. 1 unit empty (I will be living there) so GSI if I live there is 780*3=$2340/mo

asking price is 300k,

so with 3.5% FHA that's 1550 PI +262 tax +140MIP +165 Ins. leaving me about 200 positive to bank for maint/capex and living fairly free. And there's a fat upside to those rents as leases expire, because those are WAY below market for that area (about 300 a month each).

Sound like a deal, or am I missing something?

ALSO can I put this property into an LLC or trust if I live in it? I'd like to structure the deal as a business so I can protect the asset and receive tax benefits, and so I can just be the "property manager" to the tenants and not "the owner who makes the decisions".

Thanks :)

http://www.legacyhomemanagement.com/

@John Leavelle I'm thinking in terms of algebraic relationships for all the common metrics, so the specific strategy shouldn't be a factor. Each strategy may demand the use of a few different metrics (cashflow, cash on cash, cap), but generally speaking there's a pretty short list of metrics that are used to perform a basic analysis of most residential properties, whether it's a SFR or a 250 unit apartment community. I'm not looking to go into deep analysis, just "back of the napkin" stuff.

@Andrew Johnson I'm actually demonstrating some of these basics to a group, and need to do it on a whiteboard. I can perform the math "forward", just haven't had a lot of pracrice doing it "backwards".

If any of the math people out there see this, could you maybe create a cheat sheet full of these equations as they appear in the metric and then twisted back to allow for easy calculating of an offer price based on the desired result and upload it to the shared files for everyone?

By "twisting it backwards" I mean like:

if A^2 + B^2 = C^2 then

C^2 - A^2 = B^2 

OR

if E = mc^2 then

E/c^2 = m

I know I've seen it done with the calculators, but I want to do it by hand. I have all the equations for the standard metrics, but my math isn't strong enough to twist them backwards to calculate a maximum offer based on the desired metric.  Any help, please?

The process varies by state, but in general you'll need to complete some coursework to establish a baseline level of competency before being allowed to take the exam. Try entering "how to become a real estate agent in WA" into Google.

I was able to find a community college that offered the class, and get a Pell grant to pay for it... plus the federal grant pays more than the actual cost of the class, so in essence the government paid me $500 to go get my license.  

My understanding is that a new home agent (working for the developer) isn't allowed to work resales. The way the job was described to me was "sit in a model home all day, offer presentations to anyone who walks in, and upsell as many upgrades as possible."

Hi all, I just passed my license exam and went through the fingerprinting, and am preparing for the transition to full-time agency.  My question is: 

Should I take a crack at selling new construction, since the Phoenix new home market is primed?  I don't know what the income potential is.... is it worth it?  Or should I just stick with resales and direct qualified/willing buyers to new homes they may be interested in?   Thoughts?