All Forum Posts by: Al Phillips

I have found a 5 unit apartment building I would like to purchase.  I owne a real estate company and a management company and own several of my own single family homes.  This is my first attempt at a multi-unit.  Please let me know your thought on this one.

Purchase price:   $140,000.00.  5  1BR units total SF of 2,500 SF

Owner carry back second mortgage. $40,000, interest only for 4 years.

Financing:  $100,000.00

I will cover closing costs, after close fix up etc of about $20,000.00 (cash in bank)

Rents per year $37,000

Expenses per year:  $22,179 (not including any financing costs)

The interesting part of this deal is that the units are individually metered for gas (heat) and electric yet the landlord pays these bills.  I could purchase this property and start charging for gas and electrick and that would decrease expenses by about $550/mo

There is no fee to the LL or the tenant if they pay on line with an electronic check.  If they pay with a credit card there is a fee based on the amount of the payment.....very similar to merchants that charge you if you pay by credit card.  Appfolio also has a "7/11" card.   This card allows tenants to pay their rent with cash at the nearest 7/11 store (a convenience store in MI and other states).  This has worked out fantastic in my lower income multi units as it is cheaper ($3.99) than getting money orders for the tenants and a lot of these tenants do not have checking accounts or computers (to pay online).  About 70% of my tenants pay online in one form or another and this saves my office staff a ton of time. Think about it.  That is about 150 manual transactions that we do not have to do!!!

I manage about 250 units and had tried several management programs.  I ended up settling on Appfolio and have been using it for over five years now.  If you can think of something that a property management program should have...this one has it.  It has dozens of different reports, automatic posting of online tenant payments, tenant portals, on-line repair orders, a great I-pad app and more.  Three years ago I went on a three week bicycle tour and basically ran my property management business from my I-pad and cell phone.  The on-line application is a very useful part of the program and we require all applicants to apply onlin.  Then we just hit a button and the program runs a background check, credit check, National eviction search, and more. 

I tried Propertyware back before Appfolio and found it to be short on features.

Hope this helps.

Manage 300 units