Multi Family Semantics
I have been speaking with a few agents lately, and they have linked me up with MLS listings for multifamily units.
My question is this, without seeing the property, what can one glean from the slew of terms included in the MLS listings like GSI, NOI, Cap Rate, etc, Loan Payment?
Is there a hidden formula for value here that I am missing?
You NEED to be able to run numbers and talk numbers ESPECIALLY with multi's.
Bankers, mortgage brokers, insurance agents, realtors, sellers, and buyers are among the people that will use and know the numbers.
You may talk to sellers who don't use numbers as much, and when you run into them, you'll have the upperhand.
Ever seen "Fletch" when he's talking to the airplane mechanics and making up terms, and saying they need to oil the ball bearings....? Funny scene....as long it doesn't remind you of your meetings with professionals.
Read this through a few times until you know and understand it:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=467
I'd recommend creating a spreadsheet that calculates those things for you. Great way to learn how the numbers interact and why they're important.
Buy "Getting started in RE investing". Great starter book for math, terminology, market analysis, etc.
Don't let you're ignorance stop you from getting out there and talking to people. Just make sure you make a fool of yourself when it doesn't matter, and not when it does.
great thanks for the quick post.
I just re-read your post. Let me answer you a bit more directly and throw in some personal experience.
A bit over a year ago I saw a Multifamily property advertised in the paper. It rattled off a few numbers and a brief description of the property. Within 20 seconds on my calculator, I knew the place was either a hole in the ground or a gold mine. I drove by it and couldn't believe that the numbers described that property. It was a beauty.
8 months later I had the deed to that goldmine. The numbers were what drew me to it in the first place.
The thing that I love about numbers is they're unemotional. You don't get swayed by the leaky roof, the flowers, the nice cars the tenants drive, the spacious units, etc. They are blind to all of that.
Thanks, I appreciate the link to the article. It was exactly what i was looking for.
I actually searched the database and must have been using the wrong terms, because nothing came up.
I tend to be a numbers person myself.
Thanks again.