All Forum Posts by: Jason Xue

@Jacob Fortune The easiest way is to get new tenants into the units after the current leases expire. If you are extending current tenants, then a gradual increase would be good. However, I'd say to do your research and see what the units in your area looks like too. If your units look subpar compared to others in the area, then you'll need to do some makeover to get it to market. You definitely want to show your tenants that the rent increase is justified by the improvements you are making to the building itself and the units too. 

@Greg Scully 

@Chase Louderback

Great points! I am closing on a 30 unit building at the end of the month and I have been wrestling with how to best estimate the reserves amount.

@Greg Scott

@Greg Scott@Spencer Gray

Thanks for your responses guys!

I understand that commercial property is valued by its NOI and it's calculated as (Property Value = NOI / Cap Rate). When you put in an offer, do you include the reserves into the NOI to come up with your offer price?

@Rachel Imhof sounds good! I'd like to as well. PM me and we can set up some time.

Question on commercial multifamily valuation...

When I analyze deals, I include Reserves (10%, set aside for CapEx) in the Operating Expenses, which means it is a part of my NOI calculation. That's how I do it internally to account for CapEx that will happen down the line. Is that the general way to do it? When it comes time for me to sell or refinance, are the potential buyers, bankers, etc. calculating the property value including that Reserve line in OpEx or leaving it out?

Thanks!

@Ibn Abney great thanks for the share! I'm definitely interested in attending this event. How many people usually come out this these?

Any other investors out here in the South Loop Chicago neighborhood interested in getting together? It looks like majority of Chicago meetups happen on the Northside...

I'm looking for an insurance broker who can help me obtain good insurance for a commercial multifamily property in St Loius. I'll also need umbrella insurance too.

Thanks everyone!

@Caleb Heimsoth wouldn't it be a lot of work to keep track of down the line if I end up owning more property, especially in different states?

I currently have a LLC registered in the state of Illinois. If I were to buy an out of state property, what's the best way to go about holding that property? Can I hold it in my Illinois registered LLC or should I create a new LLC in the state where the property is located? Is a Series LLC a possible solution?