All Forum Posts by: Andrew Taylor

It sounds like you're operating under the assumption that every unit will need these repairs every time it's turned over. Obviously $400 isn't going to completely rehab a unit at turnover; but $19k (48 units X 400) should provide enough of a cushion to handle the odd broken door or countertop, right?

I understand that students don't take care of stuff; I have two children who just assume that money grows on trees and/or falls from the sky whenever they need it. And I've done my fair share of warranty work while building homes, so I know what kind of idiotic stuff residents do. Good news about this deal is that if it turns out 6% of rents isn't enough to cover maintenance, there's plenty of room to up the percentage a bit.

@Wes Brand, I'm meeting the seller Tuesday and will try to get answers to some of your questions, but in the meantime...

I'm a general contractor and have been for 15+ years. Holes in the wall are cheap to fix; my sheetrock guy used to send his patch guy around every week to patch holes for free, just because he wanted the sheetrock business. Not too worried there.

Granite is more expensive, but again, I've got contacts in the industry. The countertops are small, so any damaged pieces could easily be replaced out of my vendor's boneyard...and frankly in 15 years of building I've never come across a piece of broken granite. But I see where you're coming from.

The current 2-year leases are year-round leases, even though some of the students move out during the summer, if I understood her correctly.

Thanks, but don't congratulate me yet...gotta find funding now. I'm currently putting together my deal package for investors. I think I've got a lender that'll do the loan (we've got a cashflow lender here in town who seems really keen to do commercial loans), but I'll need to come up with down payment of about $550k. Ouch.

@Jason Clark, it's 48 units total.

Well, this is ALL undergrad student housing. Seller tells me she has deposits of $750 on every unit - not sure if those are from the University or the tenants (or if it matters). She says interior paint is pretty much a given on turnover, but that everything else is built to last: tile floors, granite countertops, etc.

When she and her husband built them, they were trying to show low-income students something to strive for (her words) so they built the units pretty upscale for student housing.

Forgot to mention, the units are furnished as well, and they'll be replacing some furnishings with their other CapEx stuff.

@Andrew Nevins, sure thing, but I'm not sure what the best format is. Bear with me here.

$2.6m less $520k DP plus $39k closing costs = $2.119m

$385,095 (GSI) less $19,255 vacancy allowance = $365,840 Gross Income

$140,778 Expenses (not incl. vacancy allowance) (from seller's FY 2015 P&L)

NOI = Gross income less expenses = $225,062

CAP = NOI / price = $225,062/2,600,000 = 8.66%

Cash Flow = NOI less mortgage = $77,560

COC = Cash Flow / Cash Investment = $77,560/$559,000 = 13.9%

Total ROI = Cash Flow + Appreciation (3%) + Accrued Equity / Cash Investmet

Total ROI = ($77,560+$78,000+$74,495) / $559,000 = 41%

Vacancy Allowance = $1605/mo (already accounted for above)

Maintenance Holdback = $1605/mo (already accounted for above)

If there's something funky about these methods, let me know. I'm pretty sure I got them straight off the "how to analyze deals" post and/or podcast elsewhere on BP. If they're wrong, every deal I've analyzed so far has been wrong...:)

I'm closing in on my first REI deal, and I think I found myself a doozy.

• Sales price $2.6m
• 20% DP = $520k
• Closing Costs = ~$39k
• Loan Amount = $2.119m
• GSI = $385,095
• Gross Income = $365,840
• Expenses = $140,778
• NOI = $225,062
• CAP = 8.66%
• COC = 13.88%
• Total ROI = 41%
• Cash Flow = $77,589/yr

I've included allowances for vacancy and maintenance at 6% of rents, and the actual property management fees paid in FY 2015. Vacancy is currently 0; unit is near a university, and the university has signed 2-year leases for 100% of the units (severe housing shortage in area). Maintenance is expected to be low as current owner was also the builder (units are only a few years old) and has lived on-site handling issues as they arise.

Current owners are also getting ready to do significant CapEx - roofs, exterior paint, landscaping, etc. They run a local charity and are just good samaritans as far as I can tell (spent an hour or so on the phone earlier today).

What am I missing here?

Hubspot.com is promising, although you kinda have to alter your system to work within the confines of their process. Overall pretty slick, though.

Podio looks like it could be a solution, but I'd have to make my own apps for it I think. There are a bunch of REI-centric apps already available, but none of them are "exactly right."

Thanks @Account Closed, but I don't think that's quite what I'm looking for. That looks like more of a lead-generation source. I have leads, I just need a way to keep track of them.

So I'm trying *really* hard to analyze multiple deals per day, just so I can A) get comfortable doing it, and 2) get familiar with my market area.

But I've got information scattered all over the place - spreadsheets, notepads, Google Keep on my phone, etc. What I'd really like is some kind of lead tracking application (Mac or web-based, preferably Android-friendly) that will allow me to track property information including address, seller contact info, deal numbers, notes, etc., without having to create my own database.

Does something like that exist? What are you folks using to track leads?