All Forum Posts by: Thomas Alexander

@Ludwig DiazI wouldn't say "top notch" per se. It's the lesser of crap out there when it comes to CRE market data. As Joel Owens said earlier, most of the information can be obtained by relationships with brokers. To put it into perspective, would you pay for a software that costs as much as a full-time employee knowing that will a little more leg work you can find the information you seek from brokers?

I am finding a lot of conflicting information online and was hoping for some advice. I am looking at a duplex that I want to purchase using a FHA loan and my mother as a cosigner. I was told that since it is a multifamily with a non-occupying co-signer (although I will be living in one of the units), then the loan becomes a 20% down payment versus the standard 3% down FHA loan. Is this true and can anyone confirm this?

I'm in. Looking forward to the event and meeting others as well.

#1, don't EVER use a brokers financial data on a property. #2, don't EVER invest in a MFP in California. Partner up in a Sponsor/Investor deal and take your money out of state. If distance is an issue for you, you have a gem right across the state line called Las Vegas. You asked for good cap rates and there you will get them. Don't take my word for for it. Due some Due diligence on your own in other markets and it will make you laugh at our market here in California. Unless you are doing creative offices or MOB's, just completely forget about this state...

@Mark Vieira to get the "closest" to accurate information for real estate research you have to go with CoStar. There are many other services out there which can get you lower pricing but I can guarantee you 90% you will go running back to CoStar. What sets CoStar apart is that it's the industry standard and it is updated every day by brokers and agents alike with property data on the market. If you want reliable information and especially if you have investors backing you and cannot afford weak market analysis making a deal go sour, I hope you are using CoStar, it's not perfect, but it's the best out there. That being said, the basic packages like one for Los Angeles will run you about $1,000 a month. You need to tack on the lease and sales comps to make CoStar truly useful which is about another $850 a month. I managed to get a good deal so all in all I pay around $15,000 per year which includes all sales and lease comps plus market information for SoCal and Las Vegas. Remember, CoStar comps is updated by brokers themselves, other places like REIS have a staff of around 100 people who try and do this data themselves which is impossible to replicate CoStars superiority when it's updated daily by thousands of brokers in the market. Plus it's always humorous to say the least to see their quarterly video presentations on each industry as they are the most bland geeks ever... Nonetheless their market research is a valuable tool as well.

I've also seen stabilized vacancy used as an average for the area or beighborhood the property is it.

I couldnt agree anymore with Josh in the above post. In fact, I have some institutional numbers on absorption rates and analysis I have done (which I will post later this week) which also indicate these unfavorable areas as better investments. I drove through Inglewood the other day to see how "bad" the area was and to my surprise, I found it to have it's own touch of class and a somewhat forgotten historic part of Los Angeles. I also forgot to mention that certain incorporated areas such as Inglewood DO NOT have rent-control. That to me is the biggest decision in what I will buy as an investment or not. This upcoming weekend I plan to drive around Long Beach to get more familiar with that area as well.

Jorge C. I would probably want to detour this a bit to talk about an underlying issue that is outside of fundamentals, analysis, and credit risk when investing abroad. Americans, culturally, are raised and educated differently than any other country in the world. There is no doubt in our ability to use the knowledge we have gained from our education system here and access to that knowledge making us extremely "book smart". Unfortunately, the majority of us Americans lack the "street" smarts it takes to broaden our desires to take our investments internationally. Unless you are an institutional firm in the US, you run the added risk of being swindled, hustled, and straight up robbed by places in the world that would appeal to is American investors because it makes sense "on paper". I grew up shadowing my dad as he built his international oil company every step of the way . While he while he was very "book smart", his success was credited to the street smarts he had gained by growing up in a very rough communist country of Eastern Europe. To emphasize the importance of this skill, he was utilized by many of his friends to expand their American banks and private equity firms to capitalize on other markets internationally and successfully did so. I say this also because I have a couple of friends who tried to do the same and got burned badly and after talking to others I have heard of similar stories. The global economy preys upon us Americans so you need to incorporate this into your decision to go internationally. Again, I don't mean to say this to discourage you, I am saying this because it plain and simply is the truth. Unless you are the exception or have a reliable resource, I think this factor weighs more than the incorporated factors of valuation, analysis, and foreign political instability. Tread lightly. As one poster mentioned above, real estate in America is the best place to focus on and it's for good reason that foreign investors want a piece of this market.

My agent and broker owns a huge portfolio of income properties here on the west side of LA. We actually talked about section 8 and section 42 housing today and he said he will never do it again. He said that his only exception is that he will only do section 8 for veterans. He does this not only because he wants to support them for what they do for our country, but apparently as a veteran they also get added income bonuses for section 8 which reduces the risks one typically gets with a standard section 8 tenant. He also said that his section 8 veterans tenants actually happen to be the best tenants he ever had. Some food for thought...

Thanks for both of your insight. This will help with my underwriting.