All Forum Posts by: Adam Gott

Conventional bank loans.  %3.875 for the first loan, %4.125 for the second (as my credit rating declines - it went down 90 points after the first loan!).

My ROI is ~%10 for both, not great but pretty good for our area (and it beats the %1.05 that I was getting on my savings account).

I bought a fourplex in May (thanks to all of the great advice in these forums) and am finally starting to turn a nice profit after a few months of getting rid of crappy renters.  I think the bug has bit because I just purchased a much nicer duplex yesterday and am already planning out my next purchase.

The fourplex meets the '1.2%' rule and the duplex is, for now, just over 1% (rent/price paid).  The duplex is under-leased but it's a couple of old people and they have been there for ten years so we decided to just let them continue on.

Thanks again for answering all of my questions either direclty or indirectly.

I went ahead and put in my offer on the brick duplex and it was accepted.  I liked the brick exterior and newer windows and thought that was worth a bit more than making an extra percent or two each month.

No, not buying under market.  Initially I wasn't going to allow dogs but when i bought my fourplex it came with two tenants with dogs so I went ahead and allowed dogs in the other two units and I have found that this generally has helped me attract renters.

As for subsidizing tenants we are definitely in agreement about that!

I am looking for my second multi-family unit and have two that I am considering. A nicer brick duplex with two car garage that would give me about 9% ROI or an older wood frame triplex that would give me 11% ROI.

Other things worth noting:

1.  The triplex has a family living in one half of it that has been there for 5+ years and the property is currently 'under-rented' (i.e. I could probably get $100 more rent per month.  Addtionally it looks like they may have at least five kids.   There were two bunk bed sets crammed into one of the bedrooms and there was a baby crib in the master bedroom.  They said that they wanted to stay there forever because the rent was so low.

2.  The duplex has an older couple living in one side with four or five yorkshire terriers (!).  They also say that they want to live there until they die, which may not be that long (the man is in his 90s and on oxygen).  They have been in place for nine years.

3.  Both are probably type C to B- properties but the duplex is really in pretty good shape.  The duplex has newer vinyl windows.

Well i think I may have answered my own question by posting this but I wanted some other opinions. Go for the ROI or for less headaches and less money? I use a PM so it's not a lot of headaches for me personally.

My property manager (Idaho) says that he can get someone evicted in two weeks with no attorney if I show up at the courthouse for the hearing.  He said something about having a good relationship with the judge?  At any rateI haven't had to test it yet!

Closed on Monday and already picked up my first $1300 of rent!

Not living in any of the units.

Thanks to all of the advice here I am closing on my first fourplex in May.  Two duplexes with two bedrooms each connected by a carport, each duplex ~1100 square feet. Two of the units have basements which would be ideal for a future bedroom installation once I put in egress windows.

List price $225,000, purchase price $200,000

Monthly rent income ~$2500. 

During my initial walkthrough the realtor showed me the two nicest units and said that he couldn't get in to the other two.  So I made an offer and it was accepted.  I then went in for the property inspetion and the other two units were much worse (!) but mostly cosmetic damage.  I increased my fix-up budget from $10000 to $20000 (hopefully a very conservative estimate but the numbers were still pretty good even at the higher amount) and managed to finagle about $5000 for repairs (two federal pacific breaker boxes need to be replaced and some roof work).

All of the units are currently rented but... after I sealed the deal I was told that two renters are leaving at the end of May.  It happens to be the two units that need the most work so it's not all bad as it will give me a chance to do some fix up work.

So I do feel that there was a bit of obfuscation here but the numbers still work pretty good for me to get a 12% ROI. I budgeted 10% for PM, 7% for vacancy (based on the PM saying his vacancy rate was 5%), and 15% for maintenance/capital expenditures.

It's always amazing to me to see all of those new cars at apartments!  I often see NEW cars at the crappiest apartment units!  I drive a 98 Ford Escort (and have a 95 F-250 to pull my trailer) and my wife drives a 2006 Kia Sportage - I call it 'smart money.'