All Forum Posts by: Andrew Bosworth

@Alexander Szikla

Regarding refinance, no, at least not initially.  With nothing out of pocket and good terms from the seller, I plan to let it ride for a while.  

After focusing primarily on single and multifamily rentals since I began investing a number of years ago, I became increasingly interested in self storage over the past year.  I did some research and homework and began calling local mom & pop owners in the Harrisburg, PA area where I live.

Believe it or not, the very first person I called I ended up purchasing from!  It took more than one call, but this was an unexpected start.  As fan (nerd) of sports statistics, maybe I should have stopped with this one call and finished my career with a 1.000 batting average...but I digress!

I targeted smaller facilities that would provide me with a bit of a runway for learning the business.  The property I purchased is 36 units.  I purchased it for $400,000, but with nothing out of pocket thanks to utilizing a 1031 from the sale of a few other properties.  The seller is providing financing at favorable terms.  

The property was very well run and maintained, though the owner moved out of the area years ago, so rents are below market.  Because of this, I would call it a light value add - at least in comparison to what I am used to in the world of apartment value-add projects.  

The value-add component will come operationally by increasing monthly rates as units become vacant, adding a website that will allow tenants to browse and rent units, sign leases and pay rent electronically.  I am also working on rebranding the property with a new name and logo.  Security cameras will be added to increase security.  I anticipate increasing existing rents over the coming months and taking a dynamic pricing approach to units as they become vacant.  

Once rents are at market rate, my GOI will increase by roughly 41%, with very little increase in my monthly expenses. 

In baseball terminology, I would call this a homerun single. I won't retire on this property, but it has a lot of upside, will allow me to learn the business on a small scale before growing (if I choose to) and I anticipate it being a solid, long-term hold for my portfolio.  The seller and I have formed a good relationship and he will continue to be a point of contact when I need it.  I am excited and blessed!

Feel free to message me with questions or to chat about RE.

@Andreas W.

Andreas, I highly recommend 1031 Corp.  PA-based.

www.1031CORP.com

@Adah N.

Is this an investment property or primary residence for you?

If an investment, view it that way.  It's easy to look at the numbers today and become overwhelmed.  As others have already mentioned, the property is likely to appreciate (at different rates depending on the market you're in, etc.), but also keep in mind that rents will increase, there are tax benefits and debt paydown.  Yes, you might have to put some extra money in today for repairs, but this will only add to the value of the property and what you can charge for rent.  If the numbers on this property work today, they'll likely continue to work moving forward - given you manage well.  What might look like an average investment today, could become a great investment in the future.

It's easy to become overwhelmed right now, especially in what appears to be a crazy RE market, but keep asking questions, learning and moving forward.  You'll do great!

@Joe P.

Might want to try S&T Bank in Mechanicsburg.

@Tim Ryan

Grand Slam for sure.  Way to go!

Was this your first syndication?  What were your biggest challenges during the reposition?  

@Vinnie Gatti,

Locally, I would reach out to Members 1st, M&T Bank, Univest and AmeriChoice FCU. 

Try a commercial product versus personal.

My guess is that within the next decade or two all new construction - commercial and residential - will have to comply with "green" standards.  This will significantly increase the cost of new homes, pricing many folks out of buying.  This will also make owning rental properties all the more costly to buy and manage, pricing many average investors out of the market. 

Thankful for great tenants.

Made an offer on a 12 unit apartment. 

Was presented with an option to buy a 48-unit property.

Both are off-market, value-add.  Networking pays off...

@Marita Jojo You can always add a utility service fee (or whatever you decide to call it) to the monthly rent.  I recently implemented this to a property where the sewer and trash are included in the RE taxes.  I also pay the water, so by adding a utility fee I lower my utility costs.  The tenants already understood that utilities are based on their usage, not the landlords, so they were fine with the fee.