Posted by Mark (SDCA) on June 05, 2006 at 21:38:59:
Sadly, someone very well might. Not in this market maybe but 12-18 months ago certainly. For appreciation I suppose, certainly not cash flow.
I, for one, have never figured that out but it certainly does happen. If you look for apt complexes in San Diego, you are looking at cap rates (cap, not GRM) under 5. I don’t happen to be looking for those properties.
Property in Echo Park, CA - Posted by AJ
Posted by AJ on June 05, 2006 at 11:04:48:
Need help. Found a property, needs about 100k in fix-up work. 4 units 1/1. 3500 sq. ft. living area, 7500 sq. ft lot. By personal experience (since I live up the street) the property would sell for about 1.2M, however the comps are only showing me due to lack of comparable sales about $900k. how much would you structure the offer for? Thanks for the help, and I need to submit this by today also, so quick help would be much appreciated.
Re: Property in Echo Park, CA - Posted by Kristine-CA
Posted by Kristine-CA on June 05, 2006 at 11:54:01:
What personal experience says 1.2M? Living up the street never made
anybody I’ve met an expert on valuations.
What does lack of comparable sales mean? Are there comparables for
4 units?
We can’t tell you how to structure the offer. You offer what makes
sense for you given your plan for the property and your exit strategy.
For example, if my plan is to flip it to another investor my offer may be
way different than a buy and hold landlord type. The landlord type
scrutinizes numbers and analyzes cash flow differently than I do.
If it were me, I’d spend some time figuring out what your plan is and
then prepare your offer. Kristine
Re: Property in Echo Park, CA - Posted by AJ
Posted by AJ on June 05, 2006 at 12:53:34:
I am an active investor, I rehab properties. Not saying that I have all the knowledge needed though, I always ask for help. I plan on fixing and selling this property.
There are very few 4-units in this neighborhood, mostly SFR. That’s what is causing the lack of sales comps. I wouldnt hold, because in my neighborhood it’s next to impossible to cash-flow on these properties.
There’s a comp margin from $800 - $1.4, where my thinking is that it will fall around $1.2. 600sq.ft SFR sold in the same street for $650k. my house, a duplex is valued at 1.2, however it’s not a similar property type.
Re: Property in Echo Park, CA - Posted by jason
Posted by jason on June 05, 2006 at 13:18:18:
If it won’t cashflow, and its a 4 unit, who will buy it after you fix it up and try to get close to FMV?