Verma Capital
Share
We have over 6000 apartment units with 250 employees and close to 35,000 tenants!
People often ask me "Is there a right amount of debt?"
The answer is: YES, you want to get typically as much debt as you can.
The reason for that is debt is inexpensive if you compare it to other types of financing.
If you're getting outside investors, they're going to want a higher rate of return. Outside investors may want 8-15% returns, whereas you can get bank debt for example for a couple of percentage points.
It's always easier to try to get a bank debt, CMBS debt, or any kind of institutional debt because the interest rates are much lower than it would be if you're getting debt from outside investors or from friends and family who will expect a higher rate of interest.
You want to get the highest amount of debt you can, meaning the highest leverage you can. Also, you want to get as many years "Interest Only" as you can at the beginning, so that you can fix a property up, raise the rent, and have time to do that. So by the time you have raised rents, and you're bringing in more revenue, the property is doing a lot better, and now you can afford to pay the interest plus the principal.
07/22/2021
How do you analyze a property when investing real estate?
Let me show you how I do it.
👉First, get the information from the broker.
Let them send you their apartment deals via email and the brochure which includes their profit and loss for that property, rent roll for that property, and other information.
👉Second, I'll then add those information to my spreadsheet and analyze the property and try to figure out what's the profit gonna be based on their current revenues and my expenses (I’m not using the properties expenses).
👉Other information that I'm trying to analyze here includes is the amount of loan needed, how much money I am going to make each year, and what I am going to make every single year from this property for the next 10 years.
With that information available, I can then have a good idea of the future that will guide me in the current day to decide if this property is worth buying at this price because I’m going to make X amount every year.
Need help in analyzing a real estate property? I hope those tips will help you.
me
Click here to claim your Sponsored Listing.
Category
Contact the business
Telephone
Website
Address
1200 Blalock Road
Houston, TX
77055
