All Forum Posts by: Valerie K.

I am so grateful for this community. I’m learning the lingo and what types of investments they apply to. I’m  going out of town, you’ve given me much to digest and think about! Appreciate all the feedback!

Hi Aaron! I threw 10 Cap out there as a random number. I'm just trying to understand the logic behind the numbers. I know what Cap rate is, but I'm trying to get a feeling for how experienced investors formulate their goals in a property and what they get in return. I hope that makes sense. I know there are rules like 1%, 2%, 70% ARV for flips. Should I even have a target cap date or is that incidental to the other parameters of the deal, ie purchase price, cash on cash, etc. I don't have a clear picture in my mind what a given cap rate is telling me about a property compared to another. I hope that makes sense. Thanks for your input, much appreciated.

Thank you Joe, I appreciate the insight! 

Hello BP! Can any experienced investor share their process for determining their personal target Cap Rates? I see a lot of blogs and listen to podcasts where seasoned investors have a distinct target for this number.  All I know is the basics- higher rate, higher risk/higher return.  I have never seen anyone put boundaries around cap rates that define them for specific asset classes or otherwise distinguish what they are looking for.  For example, if I tell you I look for Cap rates of 10 or less, what information does that convey to you?

Any insight greatly appreciated!

I'm out of town Aug 4 but am looking forward to meeting up at the next event! Glad to find you- I couldn't believe when I did a search recently for an OC REIA there was nothing out there. Looking forward to it!

Holtonwise.com- James Wise is on here quite a bit and he provides a lot of exposure to the Cleveland market. I have been watching his show and he has quite a range of multi family properties. I believe he is getting ready to branch out into Indy, not sure what his strategy will be.  

I'm jumping in here with a bit of a tangent, but regarding Cleveland, how much difference in turnover is a C vs B neighborhood? New and obviously attracted to the price to rent ratios of most C properties I am seeing, but wondering how big is the risk/downside vs a B? I'm not even looking at Ds other than info/comparison as I am a novice.  Current plan is buy and hold.

Darius, I live in south Orange County CA- a wonderful place to live, though very expensive. It is an area that has had big returns in the last 20 years but 1) I think we are at top of market again, 2) they don't cash flow at all.  It is a great area to own and invest but institutional investors swoop in and pay cash for places ALL the time. The median home price of those listed right now is $798k.  I will say that I have seen friends manage (after the 08' implosion) to buy short sales at 650k that are now 1.3 to 1.4. My original neighborhood that was built around 1997 in Aliso Viejo- friends there bought at 210 and are at 750 on a bad day.  Equity millionaires everywhere but now is not the time.  There are probably some great flips out there but I want to focus on buy and hold in areas that cash flow for now.

Thanks Kiera!! How do you go about finding a team? Seems if you want MLS properties or otherwise advertised deals the marketplace here is a great place to start. Many I am seeing wear the hat of realtor/property manager and I am assuming have a team for title/escrow and contractor they work with. Do you start with whoever is listing the property? I am interested in wholesale opportunities too and some of those are easier to find than others. Thanks again!

Thank you all for the quick and detailed replies!! I need to process through this and will get back to you!