All Forum Posts by: Adam M.
Adam M. has started 11 posts and replied 164 times.
Post: Do you buy small MF (2-4 units) for cash flow or appreciation?
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
Originally posted by @Llewelyn A.:
I ONLY buy 2-4 small MF, all in a very HIGHLY appreciating market, Brooklyn, NYC.
I have been doing this for the last 21 years.
In many cases, the cash flow starts out as ZERO.
HOWEVER, if you only want to do a calculation of the original purchase cash flow, you will tend to miss the whole strategy about investing in very large Metros like NYC.
When I bought one of my first properties 21 years ago, it was at Zero Cash Flow and rents were $500 per apt.
Today, that same 2 Unit building rents for $1,900 per apt and cash flows around $3k per month.
With the increased cash flow, the building's Valuation moved up from the original purchase price of $140k to $1.1 Million today.
Another missed profit generator in Real Estate seems to be the Mortgage Balance Reduction of a Fixed Rate Mortgage.
I think this is missed almost 95% of the time and I rarely see any postings about the Mort. Bal. Reduction as a profit generator.
Today, I buy buildings in the $1.5 to $2 Million price range. Even if I used a $1 Million Mortgage, had ZERO cash flow and ZERO appreciation, I will still make a Million dollars when the Mortgage Balance falls to zero. That is PURELY Math and pretty much GUARANTEED in the kinds of Markets like NYC as Real Estate values RARELY fall. If they every do, it bounces back and always goes higher.
BUT, again.... I implore the readers of this post to NOTE that I said you can get ZERO cash flow, Zero APPRECIATION and you will still make a Million dollars.
I'm completely baffled why, on a Real Estate forum like this, there are very little postings or articles that even mention the Mortgage Balance Reduction as a profit generator.
Great job man! I love hearing this perspective and I agree not many people talk about this side.
On the same note, you have a $1.1M asset that's producing $36K/year or roughly 3.3% return. Not the best on your cash, but not factoring in NYC appreciation. Would love to hear your thoughts on this.
Post: 13K Bathroom Remodel - Help!
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Tomiko Graves That should be around $3K. I'd seriously fire that GC immediately if I were you. If he's quoting you that for the bathroom, he's going to try to bleed you on everything.
Post: Communiacting with your tenants through text
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Sami Gren I personally don't do that. I have some software that we communicate through and keeps everything documented. I only tell them to call me if the house is on fire or there's a water leak.
Post: Hitting a brick wall
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
Originally posted by @Lee Haenschen:
Originally posted by @Ryan Taylor:
Hi Lee, any of those guys on your lawn crew trustworthy enough to start taking the lead on things? Maybe you could transition your lawn business into more of a passive gig for yourself?
Unfortunately no Ryan. That's a large part of why I want out of the industry. Lawn maintenance is the lowest grossing service in the green industry. Because of that we can't pay laborers anything above $14.00 per hour which brings in some less then motivated people. We've tried it all....Bonuses, higher then average pay, PTO, bonus paid days off, paid holidays etc... I still have to go behind my guys and clean up the half fast jobs they do. I get calls nearly daily with complaints that the employees missed something, hit/damaged something etc.. Then I spend all my free time doing side projects to keep extra cash flow going to keep the business expenses knocked down, and as if I had any free time the rest goes to maintaining equipment & getting things ready for the next day work. 6:30 AM - 10PM 6 days a week. It's time for a change! I've sacrificed enough and have not nearly enough to show.
Sounds like you're ready for a new business or career!! haha
Post: Hitting a brick wall
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Lee Haenschen I forgot to ask, I'm assuming you're self employed? What kind of business are you in?
Post: Hitting a brick wall
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Lee Haenschen Acquiring 6 properties/year is a great goal. You'd need to have some serious capital and cash flow to achieve that. I guess that really depends on property values of course, but if you're finding deals in this market, they'll for sure need some work and cash invested for rehab.
Post: Commercial Deal - Cash Reserves
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Dennis Maynard I haven't gotten that far into the deal, but I'd guess 2 or 3 months deposit and the lease is backed by their $1B parent company.
Post: Commercial Deal - Cash Reserves
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
I'm evaluating a deal that fell off a while back, but is coming back around. It is a build to suit and the tenant is a publicly traded company in the oil and gas space. The build will be finished in November. Would be my first major commercial deal, but the numbers look good. Thoughts?
$2,400,000
$25/SF NNN
$240,000 NOI
10% cap rate
10 Year Lease w/ 5 year Option
Post: End of Lease - Tenant Does Not Vacate (MA)
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Kelsey G. I'd give it a week before contacting them again. I'd suggest going over there and meeting them in person and chatting about the situation. A lot can get lost in texts and emails and a in person conversation goes a long ways.
Absolutely do not change the locks, you'll need to go the eviction route if it comes to that, but hope for the best. My last resort would be cash for keys.
Good luck!
Post: End of Lease - Tenant Does Not Vacate (MA)
- Rental Property Investor
- Fort Collins, CO
- Posts 168
- Votes 105
@Kelsey G. Have they responded to your notice yet?