Real Estate Deal Analysis & Advice

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Lewis Verdouw
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[Calc Review] Help me analyze this deal

Lewis Verdouw
Posted Jun 8 2022, 14:59

View report

*This link comes directly from our calculators, based on information input by the member who posted.

I would love some constructive criticism on my analysis. Also, if anyone else is interested in syndicating this deal with me let me know!

Kansas City, Missouri

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Dean V.
  • Realtor
  • Denver, CO
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Dean V.
  • Realtor
  • Denver, CO
Replied Jun 8 2022, 16:53

Hey Lewis!

Seems like a pretty solid property!  Without knowing the exact address and rent comps in that area, I'd say just make sure you have a good handle on what you can expect for rents - if there are current tenants in there, make sure you're factoring the lease renewal time in there for how long it's going to take you to increase rents or get new tenants in there at market rent rates.  Having accurate rent numbers can obviously significantly effect your property's numbers and profitability.

I'd also take another look at your fixed expenses in the calculator (electricity, gas, etc.) - this looks like a small multifamily property?  Rarely will there be ZERO landlord expenses for these types of properties - often there may be a "main" electrical meter for example which covers the common area/outdoor lights, and things like that.  You'll usually also have to cover expenses like trash/recycling removal, landscaping, and/or snow removal, and you'll find that these are definitely not insignificant.  Call around to some local companies to get good quotes so your numbers are as accurate as possible!  (And then you've also already done the research for when you need to actually hire these services out, and ready to go right away!)

I'm assuming from your $0 in management fees that you're planning to self-manage?  That's great (we do for our properties as well), and a great way to learn the management side of the business too if you're newer, but presumably at SOME point you'll want to offload this responsibility (or may have to if you continue to grow your portfolio or just life circumstances), so my recommendation is always to run the numbers a second time with an expense in there for professional management and see if it still makes sense

Lastly, because of the high up-front costs and some other factors, syndicating deals this small usually doesn't make a whole lot of sense.  That's not to say that there aren't still ways to partner on a deal like this though (we certainly have teamed up on deals similar to this one in the past) - read up on forming LLCs and partnerships and that may just do the trick for ya here ;-)

Cheers,
Dean

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Lewis Verdouw
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Lewis Verdouw
Replied Jun 9 2022, 14:39

Hi Dean, 

Thank you for the quick response and the awesome insights! The address is 15112 Bellaire Ave, Grandview, MO. I would appreciate it if you could check it out and give me some more specific pointers?

But to answer some of your questions, the plan would be to house hack this property. I would do the management myself too, but I agree that eventually I would hire a manager as my portfolio grow. 

Any more tips would be appreciated!

Lewis

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Keith Johnson
  • Real Estate Agent
  • Kansas City, MO
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Keith Johnson
  • Real Estate Agent
  • Kansas City, MO
Replied Sep 7 2022, 03:48

Hey @Lewis Verdouw! Whatever came of this deal? I see that it sold towards the end of June.

  • Real Estate Agent Kansas (#00242823) and Missouri (#2019010567)

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