All Forum Posts by: Steve Olafson

Agreed.  Most listings don't hit loopnet until they have already been marketed to the agencies known buyer pool.

You are correct in your over-analyzing of the system. :)

I base my entire investment process on appreciation.  Buy at the right time to catch a wave of rent growth and force the value up through repairs and efficiencies.  Bam!!  Double appreciation hit!

I don't know what the percentage is but I am amazed at the transactions that I see that I never saw for sale.  I probably sell about 1/3rd of my properties as pocket listings because I don't like the circus that comes with a listing.  So I would say that there are a large amount.

 That depends on how you approach LoopNet.  I have followed overpriced properties for long periods.  Sometimes motivation levels change and prices do as well.  My best example was a property listed at 5M for over a year.  They would not budge.  I checked back with them periodically.  After a year of monitoring, I got them to accept my offer of 4.1M.  One year later I sold it for 5.2M.

No!!!  They barely even track together. 

Obviously you have the numbers down. The value grows exponentially as the NOI goes up. If you trace it out on a spreadsheet it becomes apparent.

The biggest factors that affect NOI are jobs, supply, and demographics. These track differently for houses than apartments. Apartments tend to have larger and quicker swings.

If houses are in favor for some reason.  Then many of the good renters will begin moving out of apartments and into houses.  The flipside can occur as well where nobody wants to buy a house and more people become renters.

Apartment rents and overall income are going to be highly affected by supply.  Some locations are going to be easy and inexpensive to build.  Other areas are more cost prohibitive and new supply won't start until rents reach astronomical numbers.

Sunbelt locations seem to have more population growth these days.  Population has a big affect on both houses and apartments.  But the growth will be faster and more apparent with apartments.

I feel that I can track the good times to buy and sell apartments by watching these trends.  Much more difficult with houses.

You asked for advice and you are getting advice.  You don't have to take anyone's advice but there is no need to get angry about it either.

Get a quote on insurance and estimate the worst case on the property taxes.  Those are the biggest hitters on your expenses in Texas.

How do you know how much the tenants pay for utilities?  Are the units individually metered and paid by the tenants direct to the utility company?

You can probably figure something out for maintenance, advertising, admin, management, etc...

Your utilities probably include water, sewer, trash, and common area electric.  Perhaps there is gas in there as well.

My data is old as I have not bought in Texas in a number of years.  I used to use $4300 per unit per year on a standard 80's construction building with standard landscaping.  I would use $300 per unit per year for capital improvements if the building was in decent shape from the start. 

.....except knowledge.....

Very interesting concept. 

My fears have diminished greatly over the years.  This is especially true when it comes to business.

I do agree that fear is the primary factor holding us back.  I also feel that we can be content enough that we do not charge ahead recklessly in order to try to obtain all of our desires.

I feel that we live in a world of abundance.  I like to live that way. 

There are certain parts of the budget that are earmarked for investing and paying bills.  The rest is discretionary.  If we are doing things correctly they will all increase as we grow.