**JUST BOUGHT A 10 UNIT APARTMENT BUILDING NOW WHAT???
Hi BP,
I JUST BOUGHT A 10 UNIT APARTMENT BUILDING!! NOW WHAT DO I DO TO TRANSITION??
I am closing on my biggest property yet (10 units) on October 15th. I am uncertain as to the exact steps to follow when you transition. My LLC will own the property and another of my LLC will manage the property. It cash flows well with the numbers below. Expenses are verified. 6 of 10 units are on section 8 with long term tenants and is 100% occupied. I only accept direct deposit, pay online or pay through pay pal. No mailed check or pick ups.
Purchase price 300k and owner is giving 20k towards upgrades/repairs etc Plan is to install surveillance cameras, lights, paint doors and shutters, 2 water heaters and new signage and minor fixes etc. Pocket the rest ;) :P
What are the steps to follow to transition into new management.
What should I expect from the tenants?
Are my numbers realistic?
Step by step guide would be very helpful.
What do you wish you would have known when you were in my place?
Property Management software recommendations? I'll have 15 units total.
.................................................Monthly Annual % of Income
Gross Income 5250 63000 100
Vacancy 5% 262.50 3150 5
Gross Scheduled Income 4987.50 59850 95
Expenses
Property Taxes 275 3300 5
Property Insurance 275 3300 5
Electricity 150 1800 2.85
Water 150 1800 2.85
Waste Management 100 1200 1.9
Lawn Care 250 3000 4.76
Repairs/Maintenance 250 3000 4.76
Property Software 200 2400 3.8
Property Management 262.50 3150 5
Total Expenses 1862.50 22350 35.5%
NOI 3125 37500 64.5%
Debt Service 1466 17596 27.9%
Cash Flow Before Taxes 1659 19904 31.59%
Debt Service Ratio 2.13, Cash on Cash return 26.5%
At 10% cap the property is worth 375k
Thank you in advance.
