All Forum Posts by: Tevis Verrett

OhMyGarsh All of these are Great!

Jon Klaus I especially enjoyed yours.

Prepare to cry: http://www.youtube.com/watch?v=rI751j88IbQ&feature=share&list=UUCzK0azzypkGyHUY61sN-9w

Now, go call that friend/family membr whom you have been holding a stoopid grudge all these years.

Love and blessings,

Tevis

Chris,

I am a retired physician, so dont take 'cancer' at face value. Colon and prostate cancer is so slow growing that most folks die of old age, rather than the ailment.

Liver carcinoma (he is an alcoholic) is a different story. Don't be played.

Secondly, Bill Gulley and Steve Babiak are spot on. What about setting up a "reverse mortgage" scenario with him?

Be well,

Tevis

Smiling Steve Babiak got mixed up with my > and <'s.

You helped me to realize that I need GRM's less than or equal to 4 for these properties to make any sense.

Ugh, isn't California supposed to fall off into the Ocean next earthquake anyway?

Where do you smart money (without giving away any trade secrets) investors find the sweet spot deals?

They are DEFINITELY NOT with listing brokers!

(NOTE: I already know about wholesaling tactics: bandit signs, fliers, door knocking, etc. . .)

That is for the young guns, what do us folks in our 50's do?

Hug a loved one today, tomorrow is not promised!

Tevis

Grateful Steve, you da man! Sir, I follow you already and always look forward to reading your thoughtful wisdom.

You are one of the very good guys!

I am adding GRM>8 to my war chest of analytics.

C'mon y'all, arms are open, bring that wisdom!

Us newbies are hungry!

Tevis

Blessed Sunday Morning to My BP Brethren and Sistren.

I am gettting re-started in Real Estate and doing my research to rebuild my empire (dreaming, dreaming). But I digress.

I have gotten my grocery money together, lined up my partners, read and absorbed your sage advice (50% rule, 2% rule, MFR v. SFR advantages, Landlord 101, et al.) and have started looking for properties in Los Angeles, Inland Empire, and San Bernadino Counties in Southern California-my backyard.

What I am perplexed and frustrated with is the ridiculously inflated asking prices and insultingly low capitalization rates and gross rent multipliers that are out there.

This is what I found on loopnet dot com this morning:

It is a 4-plex in Los Angeles, a couple of blocks from Koreatown in the Wilshire Corridor.

Fourplex - Wilshire Center
155 N. Edgemont St., Los Angeles, CA 90004

Price:$538,500
No. Units:4
Building Size:2,682 SF
Price/Unit:$134,625
Property Type:Multifamily
Property Sub-type:Garden/Low-Rise
Property Use Type:Investment
Commission Split:2%
Cap Rate:4.43%
Gross Rent Multiplier:14.63
Occupancy:100%
No. Stories:2
Year Built:1939
Lot Size:5,401 SF
APN / Parcel ID:5518-012-012
Parking Ratio:4 / 1,000 SF

Who buys crap like this, it will cashflow. . . in 2185 AD!

Sheesh!

And furthermore, this is not Brentwood, Hollyweird, or Beverly Hills. This is a terd property in an run of the mill terd street (very little greenery, the urban jungle) in the heart of Los Angeles.

So, you are prolly gearing up to say, well noob, go to the outskirts of the city for normalized prices.

I have looked in Palmdale and Lancaster (1.5 hours commute outside of L.A. proper, and still in LA County) and the cap rates only rise to 5-7.

My question to my wise investor friends:

When you were starting out, where do you put your time and money? I thought we were still in a recovery and it is a buyers market. Am I being naive?

Where are all those distressed properties? Those disaffected out of state landlords begging to not only give the property away, also finance it for us?

I know the previous was a pie in the sky wish; but seriously, stupid top of the market overinflated pricing on unpopular multi family real estate?

I am wise enough to know putting in offer for 50% of asking price is a lesson in futility, or is it?

Also, I have read from you wise BP'ers, if you buy a property too far away from yourself, you are courting disaster attempting to PM it, better to buy local. . .

So what do you do when LOCAL SUCKS? Where do you take your focus?

Thanks for reading this far, and thanks in advance for your thoughtful advice.

Blessings in your walk, be well all!

Tevis

K. Marie and Jon have smacked it out of the park. Thank you all for your thoughtful advice.

My .02:

Take all of your docs (appraisal, tax returns, VODs, VOEs et al.) and wrestle back control of your destiny. Consult with credit unions, hard money, brokers, grandma. . .

And ask for advice on the strength of your package. You may find a portfolio lender jumping at the chance to fund you.

Also let me parrot K. Marie, make the seller your lender. This has a ton of upside!

Blessings and much good luck with this,

Tevis

James, grateful for this. My thots exactly, you have been voted up!

Tevis

As always J Man, YOU ROCK!

This gives a detailed analytical view of a property's money tree cashflow worth.

I artifically tweak the numbers when first looking at a property (because Jason and Mike shared previously to take pro formas with a grain of salt).

Once I have REAL numbers, I get a more realistic accounting of the property.

Blessings all,

Tevis

David, congrats! It looks on the surface like maad potential. What is your debt service and I dont see where you have realistically factored in reserves. What do the sellers tax returns say?

If you slap the 50% rule on this, what do the numbers say?

Smarter voices than mine dont get out of bed for less than $100 per month per unit as cashflow after all numbers are calculated (conservatively).

Blessings brother and thanks for putting this out there for all of us to learn!

Tevis

Thank you Chris!

I read through the whole thread before adding my .02, and very wise peeps have given thoughtful advice.

. . . I add: first, last AND security. If they dont have security (as that is all a chunk of grocery money) I offer to finance the security at 18% interest until paid and make it an addendum to my lease agreement. To not pay it sets up an instant default and you are covered by the last month's that you have already collected upfront.

Thots?

Tevis