Flipped 24 units so far and wrote a case study ...

13 Replies

I find your write up interesting. I have quickly looked at the write ups and suggest some changes as it was hard to follow through the numbers written sideways in the spread sheets and messaged conveyed.

While I am familiar to most of your terms, I like you consider using the following format as that is more popular by the investors. I may suggest you to rotate the spread sheet such we can review data easier. 

Most investors will want more analysis on mortgage, interest and cash flow, insurance, property tax etc(Cook Co rate is not low). If you assume 2% vacancy you assume it needs no remodeling and can be rented out the following week. That is more difficult to attain.

If you assume a 20% rent annual increase you imply all tenants will not stay, then you should use 100% vacancy after first year.  If you want them to stay use something more reasonable.

You need to assume appreciation rate based on past data for buy and hold scenarios. All charts should be $ per units not total dollars. Property management fee should be included as I am sure those owning 100 units will not want to deal with them.

 If you want to sell investors the sweet spot location you should paint north shore Kenilworth, Winnetka, Cicero, Berwyn, Southside etc. with vital parameters they need to know.  The sweet spots should be quickly identified and understood. 

Good luck.  You are almost there.   

Expense (Yearly)Other Financial Information
R.E. Taxes:$30,625Rental:$89,940Data Source:Property Manager
Insurance:$1,404Vacancy Allowance %:6%Est GRM:27.1000
Landscape:$1,080Other:$450Est Cap Rate:1.8300
Maintenance:$6,156Other Include:Laundry, Rents
Management:$400Income Gross Schedule:90,390
Other:$0Income Annual Gross:$88,582
Trash:$1,200Est Net Income:$44,925
Utilities:$3,192
Total:$43,657

A few commentaries is how did you spend so little on upkeep for these multifamily units? My client just spent on $35,000 interior for an 3/2 condo with no exterior improvement handled by HOA. A 1 br, 1 bath partial kitchen, bath partial, flooring, painting costs $9K.

 
 

@Salman V. This is amazing (especially your buying criteria, required skill set section)
I transferred the PDF to my kindle to read and take notes.

Thank you so much for sharing this case study. 

@salmon Vora.  Great case study.  Do you believe in doing these flips in areas close to where you live?  I'm in SoCal so the dynamics are completely different here.

Originally posted by @Salman V. :

I was hoping you guys could give me some feedback on my case study linked below: 

https://drive.google.com/open?id=1hhSGs7KprBE8m4Ci...

I have another 12 units for sale under contract - flipped it in under a year and will make over 100% return on cash. 

The goal is to take this case study to investors to set up joint venture deals.

Thanks,
Sal

Great read Salman!  Wishing you best of luck in growing your portfolio.

@Salman V. - How do you finance your deals?  Bridge loans? Hard money?  The lenders I've been using, which really helped accelerate the growth of my portfolio, have decent rates but don't require W2 income or tax returns.  With me being a full time investor, it was getting harder and harder to get approved by traditional financing. 

@Account Closed - I had some high paying jobs until I left about 3 months ago. I am working with a local bank (Hinsdale Bank) that is part of a bigger network of banks Wintrust. They know my business and my track record, the loan officer also owns properties, so financing is relatively easy and I get 80% LTV. I worked with them for 4 years ever since I jumped from residential to commercial. For the joint venture deals I'm working on setting up a partner would come in and provide the other 20%. As I've got 7 buildings right now I'm selling and two more that I am buying (under contract) I've been able to grow organically fast but with outside money I can take it to the next level much faster.