So, just closed on my first 8 plex Thursday. I was showing the place to possible tenants when 2 marked cop cars and 2 undercover cars come pulling in the lot looking for one of the tenants. The person viewing the apartment said “is there a police officer that lives here”? Ugghhhh not that I know of. Luckily I told them we are getting the place turned around and they still want to rent the place. I called my partner to tell him, and he says “welcome to the rental game”. Thought you guys may get a kick out of that.
So what happened why were the police there?
Fun times! Congratulations on your first property!
They wouldn’t tell me. I was pretty much begging them. I’m going to call their office tomorrow and try and get some details. One of the other tenants told me they were asking about their small child. They are pretty rough, we will probably be firing them soon.
@Ryan Proffit Congratulations on the closing Ryan! How did you organize the finance?
@Michael King I picked up a partner, used a small community bank, as well as secured a private lender. The good news is it appraised as an 8.5 cap and the rents are about 20k under market per year.
welcome to the chaos . Wait till the cops are called out to the property to try to coax your tenant off the ledge of your old Victorian roof because he’s threatening to kill himself and the other tenants come out in the driveway to watch ! Ask me how I know !! If I was there I wouldn’t be yelling “ don’t jump” instead I’d be saying “ hey throw your cash down for this months rent before you take that leap !”
Congrats on the deal, crazy way to start it out though lol. Sounds like a funny memory and story to tell down the road
Wow. That ones even crazier. When you’re dealing with people pretty anything can happen
The top 3 things to consider when purchasing real estate:
To your success!
@David Avetisyan it’s in a prime sought after location. So this was more like
Given the cap rate it appraised at, once rents are brought to market rate, we will have hopefully forced appreciation by over 200k we shall see.
@Ryan Proffit Mate would you care to share the numbers on the deal?
Purchase price 390k
Appraised for $403,500 on 8.5 cap
Ins-2600(kinda high will shop around)
Interest payment to private lender-1600 per year
I figured maintenance at 10%
Figured vacancy at 5-7%
Current payment with escrow is 2499.52
5.75 for 5 years arm on a 25 year amortization.
2 units were completely reno’d right before closing.
It is 2 separate buildings, one building is getting a new roof currently(sellers insurance claim) and both units are getting new gutters. The second units roof is 2 years old.
The plan is to raise rents and streamline costs, then in about a year refi and build 3-8 more units on existing lot. Let me know if I missed anything.
Wow those rents are way down. Guess the PO was tired. Looks like a great deal! Did you put down any of your own money on it? What's the current ROI for you? And how did you find the deal? Was it off market? Are they all 2bed/1bath? Where was it again? I think you mentioned it was somewhere east of Kansas City, right?
Pretty impressive you made it happen! Hey if I'm getting too frisky with the questions let me know!
@Ryan Proffit are you inheriting any tenants with your deal?
I personally will never inherit tenants again. I want to be able to screen my tenants and know who I’m renting to.
@Patrick Moore 2 units vacant, 2 units filled with people I know(one is my dad, 1 is a excellent guy), the other two are related families and need to be fired.
Yes all 2/1, but 4 of them are 1000 sq ft with a garage and are currently renting for 525!! They should be closer to 900. It is about an hour north of kc. My dad lived there and I could tell it was looking ran down, so I asked about it. My dads good friend owned them. He’s one of the better builders around my area, does residential and commercial. He built them new in 94 and 03. One of the tenants moved in back in 06 for 525 and has been paying that ever since. Also, he hasn’t signed a new lease since 06 either. My partner and I each have about 21 in the deal. I am not sure what roi is currently. I do know it cashflows with super low rents and 2 vacant units. But the sky is the limit in the next few years. I don’t mind questions at all.
My four unit apartment was previous rented by bad guys, before the foreclosure. I got it vacant. Thanks Freddy MAC!
When I first went there the police came by. They thought that the previous occupants were trying to move back in. The heroin dealer apparently liked his corner location.
I have made friends with the police, invited them into all the units, showed them the hidden passage from one unit to another and where the gun cabinet was build into a bunker room off the garage, with a hidden door. And they told me about the garage itself having plywood pieces rented out to people, some hanging from the ceiling and the police breaking in the door and seeing sooo many people on plywood handing from the ceiling.
I have now replaced all the doors as the police really did historically kick them in so many times the doors were bent/curved and the frames tweeked. They were not securable. One push and they opened.
I am now friends with all the police in this town, and they have all come on a tour of the apartments so they could see how the bad guys escaped them, and how lucky they were with the armory. And I will NOT rent to any of the past renters!
@Patrick Moore checked my math, I only named 6 of 8. The other two are good tenants. Pay on time and keep it clean and tidy.