Have some bucks to invest...need help on how. - Posted by Mark

import · January 13, 2005, 10:02am

Posted by Carlos on January 18, 2005 at 21:48:28:

Mark,

I think you may be right about the rental market turning up, although that’s not an area I’m very familiar with. But I’ve seen that interest-rate link argument used elsewhere, and it makes some sense to me.

But as you say, if the cap rates go up, this can take a huge bite out of any advantage you gain from rent increases. That’s why I’m not convinced that, in general, this is a time to be buying. But we don’t live in “general”, we live in our own towns and cities, and see specific deals. So, maybe if you look real hard you can find some good deals in the MPLS area.

Anyhow, best of luck.

=Carlos=

import · January 13, 2005, 10:02am

Have some bucks to invest…need help on how. - Posted by Mark

Posted by Mark on January 13, 2005 at 11:02:42:

Great site here, glad I found it.

I have an investor with about $7 million he is willing to allow me to invest in real estate. I have about 12 years experience in almost all facets of residential and commercial real estate.

I would feel most comfortable in a residential mutli-family scenario. After reading a lot here about cap rates, is this really a bad time to invest? If you were in my shoes, what would you do if you were investing in residential multi-family? What kind of IRR will real estate investors look for with real estate investments today?

One other thing. Is it true that as interest rates rise, demand for rentals will go up and rents can therefore be increased after having been steady for so long? I am thinking that this alone may make it a good time to buy. I know this is a simple statement, but I’m sure there is a genius here who can correct me.

import · August 29, 2008, 10:45am

Re: Have some bucks to invest…need help on how. - Posted by Lori McMahon

Posted by Lori McMahon on August 29, 2008 at 10:45:22:

My client is looking for a JV Partner - 49% ROI plus principal (at re-finance), 12 to 36 month term - $1.5 mil needed - $3.4 Equity - Management and Operations in place - All insurance in place - Large 200-Unit Luxuary Apartment Complex in Dallas, Tx. Please email for more information.

import · January 17, 2005, 7:27pm

Re: Have some bucks to invest…need help on how. - Posted by JOHN GARLAND

Posted by JOHN GARLAND on January 17, 2005 at 20:27:14:

STOCK OPTION’S AND A LITTLE REAL ESTATE

import · January 14, 2005, 6:09pm

Re: Have some bucks to invest…need help on how. - Posted by chet

Posted by chet on January 14, 2005 at 19:09:13:

what are your investing goals? Cap Appreciation or cash flow?

How about a blended approach like a mutual fund (reit?).

A little hard money lending, a liltle buy and hold (Apts, commercial), some deveopment, etc.

Diversified risk.

import · January 13, 2005, 2:03pm

Re: Have some bucks to invest…need help on how. - Posted by Carlos

Posted by Carlos on January 13, 2005 at 15:03:29:

Mark,

I’ve said it before, so I’ll be consistent and stick to my guns: generally speaking, I think this is the time to be selling, not buying.

You’ve heard the old sayings, like “be buying when they’re crying, selling when they’re yelling”, and others like that, I’m sure. There’s a lot of truth there, so I think you want to think real hard before making a move.

Having said that, let me also say that I hope you noticed I qualified what I said with “generally speaking”. As we all know generalizations are dangerous, and that’s true here too. What I’m getting at is that even in up markets, it’s possible that you might run accross a good deal. BUT, it takes a ton more looking to find them!

You haven’t said where you are, and real estate is very local, as we all know. So it’s possible that you may be in an area where real estate is currently depressed, but which you feel is going to turn around. Or maybe your market isn’t depressed, but you’ve managed to find a good deal due to the peculiar circumstances surrounding it. In those cases, now might well be an OK time to buy.

But what’s a person to do, otherwise? Well, in my case I’ve turned to developing. Even though the costs of land and some raw materials such as steel have risen, there is still a large amount of profit to be made between what it costs to build a building and what you can sell it for. Of course, you have to find buyers or renters, and that is one of the risks involved here, and you also have to keep an eye out on interest rates, but I’m comfortable with that. Finally, it takes a lot more time to build something from the ground up than to buy it. That is part of the reason why development profits can be so nice, but it also means you’d better be prepared to put in a lot of your own time personally, as well as calendar time waiting for city/county approvals and the construction itself.

Anyhow, those are my thoughts, hope it helps.

=Carlos=

import · January 18, 2005, 2:50pm

Re: Have some bucks to invest…need help on how. - Posted by Mark

Posted by Mark on January 18, 2005 at 15:50:25:

Hi chet,

Investing goals? This is not my money…but I need to make money and so does the investor. I would like to get into deals that would allow me to manage and recover some kind of asset or mgmt fee. This is a must for me else I come away with nothing.

That said, I would like to work on improving cash flow after purchase. As far as cap appr, this one I have struggled with. Is it not directly related to your NOI? If so, would that not also be related to my cash flow? If I work on increasing NOI, will that not also provide me with cap appr?

Thanks.

import · January 18, 2005, 2:42pm

Re: Have some bucks to invest…need help on how. - Posted by Mark

Posted by Mark on January 18, 2005 at 15:42:53:

I’m in the Mpls area.

Thanks for the information. I’ve always believed that everytime is a good time to buy as long as you’re buying it for the right reasons and the right price. Determining what is right is the hard part.

I would NOT be interested in the time consuming nature of development. I’d like to stick with an area that have at least a little experience and some good friends that can help with some real estate analysis.

Isn’t the market starting to turn around? If so, wouldn’t now be a good time to find some desperate sellers? Is it correct that as interest rates rise, more people are looking to rent? If demand increases for rentals, can not rental rates be increased? I would think increasing NOI without investing additional funds but by just increasing rent is a huge coup. This based on my assumption that rental rates have been flat for years and are due for a bump with the changing economy. Then again, cap rates would go up with that in mind and you’re basically breaking even no matter what you do…right?

import · January 16, 2005, 8:58am

Confused =) - Posted by Mike

Posted by Mike on January 16, 2005 at 09:58:44:

I graduated high school in 1997 and thus far have never seen a down time or
>>>You’ve heard the old sayings, like “be buying when they’re crying, selling when they’re yelling”, and others like that, I’m sure. There’s a lot of truth there, so I think you want to think real hard before making a move.<<<

If we wait around until they are crying then i think its going to be years before you ever buy anything! I have 2 apt complexes that i bought 3 years ago and they are doing great. As long as i have cash flow and pay for consumer items in cash then im doing fine.

As I learned early on, if you are always looking for the good deal then you will never buy anything. There are deals out there; however, everyone is looking for them, but they can be found. Look for the motivated sellers! Granted you dont want something with negative or break even cash flow but if the numbers make sense then buy.

It seems as if sellers markets last for years and the way I see it you can buy in either market. Now my one complex is in Pittsburgh and the other is in Nashville. Not hot markets like Boston, San Fran or LA. Prices seem to remain steady in these areas. Although i am hoping for rates to start climbing to slow down this surge of buying. Yes this will cause prices to decrease but once again… if you have cash flow and are making money then in my view the numbers worked. You may have to hold onto the property for several years though so be prepared!

import · January 18, 2005, 8:47pm

Re: Have some bucks to invest…need help on how. - Posted by chet

Posted by chet on January 18, 2005 at 21:47:49:

working to increase NOI would increase your income or chase flow. captical appreciation if the increase in the value of the underlying asset.

e.g.

own an apt build, which give you x% cash on cash return, and Y% capital appreciation.

if this is someone else’s money, you might want to look at the legal and licensing issues.