All Forum Posts by: James Lusk

@Rudy Manna. Wow! Well that is encouraging! Is your tri-plex a converted SFR or original tri-plex? The one I am looking at is a conversion. It was done back in the 50s and they did a new entrance to create individual front doors. Wondering if that makes much difference with rents. Also, did you have any capital repairs to do or was yours pretty much turn key?

I will be driving the neighborhood this week, carefully it sound like!  

@Catherine German. I actually will not be doing any repairs or maintenance myself. I don't want the profitability of our properties to rely on me doing work on them, although I am pretty handy!

I will be sure to keep rodent control in my numbers. 

The street seems pretty nice. You can see the care that neighbors have put into maintaining their homes and yards. There are decent vehicles in almost every driveway. I haven't gone to drive the neighboring streets yet. Due diligence will be this week.

Thanks for your input!

@Shelley Greene. You obviously have more insight to share than you give yourself credit for! All very good points. Let me address them individually.

-The 0$ initial repair budget. The seller wants to make any repairs needed that come up in inspection rather than negotiate further down. We will see when the time comes. My broker informed me that the roof will likely need replaced. For now, I have 0$ but will adjust based on the results of the inspection.

-Rental rates. I have contacted a couple sources (property manager and broker) that I trust to check these rates. They believe these are market rates. I have found that rates are pretty close from what I have found although it is tougher to find units for rent in a tri-plex to compare. I will for sure put more effort into verifying these numbers though.

-10% ROI. When I started actively looking for a multi, I told myself that 10% was my cutoff. It cash flows well (for me) which was our top criteria. Perhaps as I progress my standards will raise. For now, I am happy with 10%.

Thanks for taking the time to dig in to the details here. It is truly appreciated. I have a feeling you are closer to being ready to make a move than you think. You seem to be making the right checks and taking the right precautions. I just decided to get past the analysis paralysis and take that action!

@Darren Budahn. Indeed there was confusion! You just cleared it up for me though. I was wondering where the seasoning requirement was coming from. As you clarified, it's from the lender providing either the refi, or delayed financing. 

I was thinking about it the wrong way, thinking that the requirement came from your hard money lender, or whichever original lender you used. This had me wondering why a seasoning period would be required if you paid all cash. All clear now. Thanks!

Hi BP! My wife and I just reached mutual acceptance on an off market triplex in Tacoma, WA. I would love to hear some community feedback/constructive criticisms you may have. 

We are purchasing this property with the intent of eventually doing a 1031 exchange into a small apartment complex (within 7-10 years). 

We haven't had the inspection yet, nor have I verified the seller's rent roll or expenses other than property taxes. I have factored in 5% for vacancy, capex, and maintenace. 8% for property management. The property is a turn of the century home as most are in the area that this triplex resides. Do any of you have any thoughts as to how much to set aside for maintenance on these older properties? Here's the link for the breakdown.

https://www.biggerpockets.com/calculators/shared/348735/9aa3c6dd-ac72-428e-baad-bc5c78301ba1

Thanks in advance for your input!

@Christian Bors. In the case of a TK, I see that wouldn't make sense. In the case of a true BRRRR though, would a seasoning period be required if you had paid all cash?

Who is it that requires the seasoning period?

At that point it wouldn't be a refi, it would be a finance, right?!