All Forum Posts by: Scott Sutton

Thanks very much, gents. I've passed all of this along to my friend.

I have a friend with an 86-unit apartment building on Mt. Prospect Avenue in Newark, NJ. He's thinking of selling the property, and he asked me how he should estimate the market value.

$630K yearly - Gross Operating Income (including a vacancy factor of 13%)

$457K yearly - Gross Operating Expenses

$173K yearly - Net Operating Income

I'm unfamiliar with calculations of market value for apartment buildings of this size, so I'm wondering if anyone could please provide some guidance in how to do so.

Thanks,

Scott...

Harry Browne's 'Permanent Portfolio'
http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/

Performance
9.7% Compound Annual Growth Rate (CAGR) since 1972 with -4% as the worst single-year loss in 1981. (In 2008, the Permanent Portfolio finished up 1.9%.)

Philosophy
"The Permanent Portfolio idea separated ... economic cycles into four basic categories:

1. Prosperity
2. Inflation
3. Deflation
4. Recession

At any one time, the economy will be in one of these phases or transitioning from one phase to another. This is the secret of the strategy and why it works. The strategy does not attempt to predict when these things happen or guess how long they may last. Instead, it holds specifically chosen asset classes that respond well to these cycles no matter when they happen or for how long."
http://crawlingroad.com/blog/2008/12/18/the-permanent-portfolio-allocation/

More information:

www.crawlingroad.com

The most heavily trafficked thread in the history of Bogleheads.org:
http://www.bogleheads.org/forum/viewtopic.php?t=15434&mrr=1281989572

http://www.marketwatch.com/story/a-portfolio-for-all-seasons-2010-05-19

Thanks for the input, everyone.

I just re-ran my report on MyFICO.com, and now I'm showing scores of 760 and 776. I guess I must have done something right over the past couple months, but I sure don't know what changed.

I assume it would still be of use to try and raise my score to 800, if possible. Digging in now to see how I can do that exactly.

Hi everyone,

Sometime over the next 6 to 12 months, I plan to acquire my first investment property. My current FICO scores range from 726-738. Four years ago, my scores were around 790.

Since I don't have any blemishes on my credit history, I assume the drop in score is due to the limited amount of credit I carry. I rent my place, my vehicle is paid for, and I only carry a single credit card.

For someone in my position, what's the best and quickest way to improve my credit scores? I've heard that perhaps I should pick up 3 more credit cards or so, and rotate my purchases on each. Would that do it?

Thanks,

Scott...

Thanks for the responses, everyone. It certainly sounds like there's no substitute for networking with other investors in the area. I'll see what I can do to get connected.

Hi Everyone,

From those of you who have invested in markets other than your hometown, I'd very much like to hear how you went about finding:

1. The realtor with whom you worked (if applicable), and
2. The management company for your property.

When I determine the market in which I want to invest, I'd like to interview and vet 5 realtors and 5 management companies, so I'm looking for credible sources for referrals.

Needless to say, personal references from someone you trust would be best, but how do you handle this process if you don't have such an option?

Thanks,

Scott...

Hi everyone,

I originally posted this question in the Arizona investors forum, but it seems to be infrequently used so I'm re-posting here. I'm looking for a few suggestions from those familiar with the Phoenix market.

1. In the Phoenix area, which property-management companies would you recommend (or avoid) for properties with 4 or fewer units? I'm compiling a list of 5 or 6 candidates.

2. Aside from BP, what other message boards or forums would you suggest for someone in the process of learning about the Phoenix market?

Thanks,

Scott...

Donna and Realty Dude, thanks for sharing.

Just fyi for those who might be interested -- in another thread, someone recommended city-data.com for statistics on various US markets. The forum on that site also appears to be a voluminous source of (mostly subjective) commentary.

Jon H and J Scott also pointed me to two books that get into some detail on the subject of market evaluation. (I have as yet to check out either.)

"Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas," by Dave Lindahl

"How to Buy and Sell Apartment Buildings," by Eugene Vollucci

Hi everyone,

I'm in the early stages of deciding where I want to focus my initial efforts in REI. Specifically, I want to evaluate a few markets for the purpose of buy-and-hold, cash-flow investment in residential properties (single-family houses or 2- to 4-unit multi-family properties), so I'm curious about the process employed by other investors to assess and contrast a handful of markets when determining where to invest. In particular:

1. Exactly which factors/data did you consider?


2. How did you prioritize this information?


3. Why did you adopt this particular approach?


4. Would you do things differently today?

Please note, I understand that ...

1. There is no 'one-size-fits-all' methodology.


2. Opinions will differ widely with respect to which factors one should consider, and the relative importance of each.


3. Circumstances and objectives will vary from investor-to-investor, and from market-to-market.


4. A high-level analysis of a city's real-estate market has limited utility since 'all real estate is local' and opportunity exists in most every city.

That said, I still think it would be instructive to learn about the thought process and methodology employed by others when analyzing the potential of various real-estate markets. From what I've read thus far, REI authors touch on this subject in only the most general terms -- i.e. to evaluate a market, one should consider population growth, economic conditions, infrastructure, average cap rates, housing supply and demand, the legal environment, etc. While such guidelines are a good starting point, hearing a few examples would be helpful.

Thanks,

Scott...

Note: I don't think it's relevant to the question, but if you're curious, the markets I'm interested in contrasting are as follows:
Phoenix AZ
Tucson AZ
Charlotte NC
Charleston SC
Portland OR
Vancouver WA
Dallas TX