All Forum Posts by: Ashley B.

@Jim Walters I really appreciate your words of encouragement. Obviously this isn’t the way I was hoping to start but I will push through it. I’m sure one day I’ll be able to look back and laugh. 

After 8 months of research and preparation, I finally closed on my first deal - a SFH in a decent neighborhood. I’ve been waiting and working hard to achieve this dream since I graduated from college 10 years ago. This property exceeded my minimum requirements so I thought it would be the perfect property to begin my REI career. I anticipated putting about $4000-$5000 into it to address a few safety issues, make a few repairs and get it rent ready. My inspector didn’t note any serious issues besides the fact that the toilet was leaking into the crawl space. He said it would be about an $800 fix. I was concerned that the seller wouldn’t repair it properly so my realtor suggested that we just take it off the purchase price. I asked for $1000 off the purchase price which also included the cost of putting a couple of GFI’s in the kitchen and we called it a done deal. Since taking possession 9 days ago, I’ve had nothing but problems and bad news. I discovered that there are flooring issues in one of the bedrooms so the contractor will need to cut the floor up to see what’s going on. Apparently the seller had to replace the floors a few years ago due to issues with the joists but didn’t take care of the bedroom. My contractor said we might have to pour some concrete down there but we won’t know the extent of the fix until he opens up the floor. The next issue the seller chose to ignore was that the hot water heater has been leaking for quite some time. We shut off the water and drained it last night but I walked in this morning and it was leaking out of the bottom. I had to make an emergency call and I’m currently waiting for a plumber. At the beginning of last week I unplugged the fridge and left the doors open. Thought this was a good idea since the fridge isn’t going to be used for a few weeks. When I walked in yesterday the laminate in the kitchen was buckled from water damage. There was water all around the fridge. I never saw that one coming. Now I will will also be replacing the kitchen floor. A couple of weeks ago we bought a new washer and dryer for our home so we could swap out our old washer and dryer and put it in the rental. The washer and dryer hook-ups are in the garage. My husband just noticed today that there are no pipes connecting to the hook-ups because lo and behold, they froze at one point because the garage is not heated. My realtor was the listing agent as well and I made a comment about the washer/dryer hook-ups as we did our walk through. He never said they couldn’t be used. Shouldn’t that have been disclosed? Now I need to figure out how to make it work because I can’t have a SFH without a washer/dryer. I’ve received one estimate so far from a general contractor and it was $13,000. That’s if the leaking toilet didn’t cause more damage than a couple of floor joists. That also didn’t include whatever water damage the hot water has caused, the floor issues in the bedroom and the fix for the washer/dryer hook-ups. The entire place needs a fresh coat of paint so I could be looking at putting close to $25,000 into this place. I feel like I’ve made one of the biggest mistakes of my life right now. I understand that there are so many unknowns when it comes to real estate and nothing is easy, but I didn’t anticipate this scope of work for my first deal. I was hoping to land a decent house that only needed a few thousand dollars worth of work so I could get my feet wet and start being a landlord. In 8 days this house has become a money pit and has completely squashed my desire to ever invest in real estate again. Is my situation pretty standard or is it just bad luck?

@John Lenhart I just saw your response. Thank you for responding! DePauw students are actually required to live on campus so I won't be renting to students. Two units are rented to an older couple and and an older individual.  The other 3 occupied units are rented to younger individuals.  The more I've thought about it, the more I'm liking the situation. I'm hoping to close around the 25th of July so I can can give the tenants 30 days notice to either sign a month-to-month lease with rents at market value effective September 1 or to vacate by August 31. I just hope the building doesn't clear out since rents will be increasing slightly for 4 out of the 5 occupied apartments. I don't anticipate that happening but it's still a concern.

@Aaron K. I included a requirement for estoppel agreements in my purchase agreement so I'm good there. Thank you for responding!

I have a 6 unit multi family property under contract as of this morning and just found out that there are no leases. This is my first deal and I’m shocked to say the least. However, I know there are pros and cons to this situation. Pros being that I can give the 30 days notice to any undesirable tenant the day of closing. However, with one apartment already vacant that will be completely renovated after closing, I don’t want another vacant apartment. The current rent roll the sellers provided to me twice never matched with what 2 of the tenants told me they were paying so on the positive side, I will have leases ready to go on the day of closing with rent at current market value. Two of the tenants have been there 10 years so I don’t anticipate them leaving over an extra $50/month. This does add extra layer of stress and concern but the more I think about it, the more I’m coming around to the idea that this could potentially be a good thing. Has anyone else been in a similar situation when purchasing a smaller multi family property? How did it turn out for you?

@Account Closed In my area, tenants are looking for no more than $750/month. The pool of tenants that are able to pay more than $850/month are slim.

@Nathan Kyle Taufer $700 for both and yes, I agree with you. I know they aren't giving me accurate repair expenses and I assume it's because they are terrible at bookkeeping. It's very apparent they don't keep records so I'm trying to work off what I'm getting. The current owners have only had the building for 2.5 years. They live an hour away, self manage it and are too busy with their jobs to do so. I figured 5% for maintenance and 8% for CapEx in my analysis. The building is older but I will be renovating each unit when the tenants move out.

I do! I actually asked for the last 2 years of P&L statements and essentially received the last 12 months of income/expenses written on a napkin. Rents have been stable. They claim $700 for 2 new hot water heaters over the past year and that’s it.

Hi, everyone! I'm looking to purchase a 6 unit multifamily property to begin my real estate investing career but I'm getting cold feet. I've analyzed and reanalyzed but I want to throw the monthly income/expenses out there for a few seasoned multifamily investors to analyze for comparison. Everyone seems to factor in vacancy, repairs and CapEx differently so using your standards, what purchase price would make this a good deal for you?

Asking Price: $169,900

Current Rental Income: $2990

Property Taxes: $278

Insurance: $164

Landlord Paid Utilities/Trash: $416

Thank you for your time and expertise!