Multifamily listings

[The OC Scam]

Anyone following the Multifamily listing in or around OC?

I have been searching for the last few months and find almost all of the properties are overvalued by atleast 20% – 30%.

Can anyone tell me the reason why “Sellers” think that a property listed for $849,000 with $3,000 a month in rent income.. is a good investment and will sell?

Thanks,

theOCscam

[(former)FormerSanDiegan]

Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]

[(former)FormerSanDiegan]

Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]

[(former)FormerSanDiegan]

Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]

[(former)FormerSanDiegan]

Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]

[(former)FormerSanDiegan]

Consider this as an investment with a 4.2% dividend (3000*12/849000)*100. Now, we all know that real estate appreciates by 10% annually. You know that RE investing is all about capital appreciation. This property gives you that PLUS a 4.2% dividend. Compare that to the S&P 500 which pays less than a 2% dividend.
That’s why that property is worth 850K. Heck, if you measured the price in bags of rice, you’d realize that it’s at an all time low. Once people price in future appreciation, prices should go up from here. This property beats the 2% you’re getting in your passbook savings account. Plus, they aren’t making any more land in the OC. [/sarcasm]

[The OC Scam]

Now what if I told you the $849,000k property was bringing in $5,000 a month? I just went to the property today to the listing agent..4 units

[The OC Scam]

Now what if I told you the $849,000k property was bringing in $5,000 a month? I just went to the property today to the listing agent..4 units

[The OC Scam]

Now what if I told you the $849,000k property was bringing in $5,000 a month? I just went to the property today to the listing agent..4 units

[The OC Scam]

Now what if I told you the $849,000k property was bringing in $5,000 a month? I just went to the property today to the listing agent..4 units

[The OC Scam]

Now what if I told you the $849,000k property was bringing in $5,000 a month? I just went to the property today to the listing agent..4 units

[(former)FormerSanDiegan]

OK. In all seriousness, that would be about 7% gross on a small property (4-unit). Since its 4 units you can get a conforming loan at about 6.5% with about 25% down.
That’s not horrible. But not great, because after maintenance it is likely to have little or negative cash flow.

P&I = 4000 / month
INsurance = 200 /month
Taxes = 800 / month
Total PITI = 5000 per month

Maintenance might be ~ $700 for month long-term average
So, this would only make sense if you are assuming appreciation. Also, what about property management, probably another 500 per month if not self-managed.

In an all cash deal, you might expect to net about 4-5% of your investment after expenses (before taxes). IN that case it would only make sense if one had a large carryover loss from a previous property or something.

This is far from a great deal, but seems appropriately priced for last years’ market expectations (soft landing).
I’d bet that if someone bought this today, they would do pretty well over the next 20 years, but I think that there will be much better deals than this over the next couple years. Just my amateur opinion.

[(former)FormerSanDiegan]

OK. In all seriousness, that would be about 7% gross on a small property (4-unit). Since its 4 units you can get a conforming loan at about 6.5% with about 25% down.
That’s not horrible. But not great, because after maintenance it is likely to have little or negative cash flow.

P&I = 4000 / month
INsurance = 200 /month
Taxes = 800 / month
Total PITI = 5000 per month

Maintenance might be ~ $700 for month long-term average
So, this would only make sense if you are assuming appreciation. Also, what about property management, probably another 500 per month if not self-managed.

In an all cash deal, you might expect to net about 4-5% of your investment after expenses (before taxes). IN that case it would only make sense if one had a large carryover loss from a previous property or something.

This is far from a great deal, but seems appropriately priced for last years’ market expectations (soft landing).
I’d bet that if someone bought this today, they would do pretty well over the next 20 years, but I think that there will be much better deals than this over the next couple years. Just my amateur opinion.

[(former)FormerSanDiegan]

OK. In all seriousness, that would be about 7% gross on a small property (4-unit). Since its 4 units you can get a conforming loan at about 6.5% with about 25% down.
That’s not horrible. But not great, because after maintenance it is likely to have little or negative cash flow.

P&I = 4000 / month
INsurance = 200 /month
Taxes = 800 / month
Total PITI = 5000 per month

Maintenance might be ~ $700 for month long-term average
So, this would only make sense if you are assuming appreciation. Also, what about property management, probably another 500 per month if not self-managed.

In an all cash deal, you might expect to net about 4-5% of your investment after expenses (before taxes). IN that case it would only make sense if one had a large carryover loss from a previous property or something.

This is far from a great deal, but seems appropriately priced for last years’ market expectations (soft landing).
I’d bet that if someone bought this today, they would do pretty well over the next 20 years, but I think that there will be much better deals than this over the next couple years. Just my amateur opinion.

[(former)FormerSanDiegan]

OK. In all seriousness, that would be about 7% gross on a small property (4-unit). Since its 4 units you can get a conforming loan at about 6.5% with about 25% down.
That’s not horrible. But not great, because after maintenance it is likely to have little or negative cash flow.

P&I = 4000 / month
INsurance = 200 /month
Taxes = 800 / month
Total PITI = 5000 per month

Maintenance might be ~ $700 for month long-term average
So, this would only make sense if you are assuming appreciation. Also, what about property management, probably another 500 per month if not self-managed.

In an all cash deal, you might expect to net about 4-5% of your investment after expenses (before taxes). IN that case it would only make sense if one had a large carryover loss from a previous property or something.

This is far from a great deal, but seems appropriately priced for last years’ market expectations (soft landing).
I’d bet that if someone bought this today, they would do pretty well over the next 20 years, but I think that there will be much better deals than this over the next couple years. Just my amateur opinion.

[Author]

Posts