All Forum Posts by: Art Mimnaugh

@Sudarsun Koirala we just restanlized so tenets are new this year.   Happy to discuss and answer any questions just PM and we can go over details.   

Cheers.

Art

Great performing duplex on the North Side of Columbus with strong cashflow.    Recently painted, updated kitchen cabinets, and brand new Hot Water Tanks for both units.    Current leases with tenets responsible for all utilities.     Rents in area have been improving and are now in the $650 range leaving strong upside.   Great starter for new investors looking to get into the redhot Columbus market at a fantastic price or for seasoned investor.   Professional property management is in place and willing to stay on.   We have a larger project we are working so time for this one to go.   This is an off-market deal so not looking for agents to represent.   Happy to answer any questions one may have so just reach out.

More details and additional pictures

@Raul Velazquez Jr I agree with @Trent Ecklar in that the most cost effective way is just split the per bill per unit and make sure is clear in your leases.   If you inherited the tenets and leases read through them as I have found in a few cases the terms were already there it was just not being enforced by previous landlord.   In some of my four-plex’s have sub-meters but to be honest it is almost more work and costs versus just having the PM divided evenly.   The expection to this is if you are on Franklin County Water as those fees are significant so we do use the sub-meters for those units.

Cheers,

Art

Anthony LoPrinzi would recommend you connect with Robert Ellis . As an OOS investor myself Columbus has done very well for us and have used Rob on a number of deals. Knows the market well with a number of connections, you just have to be willing to pull trigger when you the find the deal that works. The Columbus market has been crazy and I know a large number of OOS investors are testing the waters, so just make sure you are ready to move or you will find your calls go unreturned as A players don’t have the time. Cheers and welcome to Columbus market!

@Chris Sweeney congratulation on taking the first step and starting to anyalize deals!   Having looked over your numbers a few things jump out at me:

1. Assuming rent of over $1k in South Linden is VERY aggressive.  I would expect more in the $750 range but as you mention consult with a property manager to review.   Additionally you can look at hotpads to see what inventory is out there and at what price.

2. Property management rate of 5% is low especially if you only have a few units.   With lease up fees and other costs would budget 10%.   Given you are also in South Linden you are in class C so with require more management involvement.

3. For non-owner occupied expect to have to put down 25%, and for a 30 year would be looking more around 5% than 3%, but consult with a mortgage broker to give you more details around that.

I own a duplex around that area and as much as I would love to see someone buy this north of $100k I don’t see it.   There are a lot of other deals out there in that area if that is where you want to be focusing.

Hope this helps,

Art

@Rohit Kejriwal when you say buy under an LLC, if you just established there are significant issues with this assumption based on loan types you are looking at. Also it sounds like you may be at a point of analysis overload and because a deal is better than another one you want to jump even though it may not be a good deal. Not saying this is case just make sure this deal fits your criteria and not something you are compromising on to just get into a deal. PM if you would like and happy to have a quick call from my viewpoint but also balance that with others within your network.

Cheers,

ART

@Rohit Kejriwal what is drawing you to this deal? As a local, with opportunity to live in you have SO many great options that outside investors don't that in my mind would represent significant more upside and value. Obviously with owner occupied you can do the normal FHA, but you also have options with Homepath and also look at a 203K loan with as little as 3.5%. This would allow you to deploy capital in forced appreciation of the rehab. Just a thought.

If you do still want to go down the non-owner occupied path I have used NFM Danial Sa Team to fund 4+ deals for non-owner with slightly higher rates ~5% but easy and they hit all the closing dates needed.

Hope this helps,

ART

@Marie-therese Tai as @Nathan Gesner mentioned this is about training tenets on what you will allow.   Now I am not familiar with tenet rights in New York but I have found a couple of things that have worked well for these types of situation:

1) I write the lease with a fixed late fee $25 after first as well as a per day fee for everyday after the third at $5 a day.   This helps to align incentives as if you just have a fixed late fee what is there incentive to pay once it is late until the next month?

2) Be clear on process and follow it to a tee every time.   For my properties Rent is due on 1st late on 3rd, we post on the 6th and file on the 9th.   It is amazing when they see you following through how quickly it turns around.

3) Last step is we don't allow for partial payments to avoid situation of not being able to file for that month as we have collected rent.   This also helps us to make eviction process very easy on any tenets we have been having problems with by sticking to the process and having it work for us.

Hope this help,
ART

@Anna Runkle at the core a "Deal is a Deal!"   Now with that said not every deal is the right deal for a given person or situation.   You need to make sure you have clearly defined goals prior to getting started and make sure this property fits into those.   

From reading your summary I see a lot of "hearsay" information.   The great part of investing in real estate is there is so much data out there you should always be able to either substantiate or dis-prove that hearsay with this data.   Zillow has a great data product you can run and see rent trends, DOM, etc for a given zip code over a defined period of time.   There is similar government data around population growth, job, etc as well.

A few other items to consider:

1) As some else referenced in all deals you have to understand your exit but especially in rural markets.    Should market turn or your vacancy goes up to 20-25% does that still pencil out given you are deploying most of your working capital.

2) You mention your Real Estate agent is also the property manager.   In my view this is NEVER a good idea and there is a clear conflict of interest.   On an average deal they are getting paid a year of management fees as a commission, so when there phone rings who is going to get their attention a buyer or tenet.    As @David Greene mentions get Rock Stars on your team and give them their swim lanes!   You want the expert in their field not a generalist that is an inch deep and mile wide.

3) Make some calls and check with other property owners in the area.   How are they seeing market, how long is it taking them to fill.  How are utilities handled (Bill back, owner paid, etc) What is the mix that is or isn't renting.   I would imagine that in rural area 2+ BD's are what is in demand and buying a bunch of 1 BD or studios may prove problematic.

Hope this helps and best of luck making the best decision for your goals!

Cheers,
ART

@Account Closed sounds like a fun project!   We had actually started to explore this option earlier this year on a smaller scale in the Santa Rosa area.    Given the fires had hoped it might be a more friendly permitting process to try and make happen but we ran into a bunch of issues related to zoning that reduced the number of units we could build on our targeted lots.   

From a build cost standpoint, we found a large number of options but the prices seemed to be significantly higher then we could contract to build ourselves.  Many of there business models were less about cost savings on the build but more around the savings associated with time.

Keep us posted as to how this goes as am very interested,
ART