All Forum Posts by: Arthur Banks

I'm looking at a fully rented 3 unit. The tenants are all on M2M (month to month) leases with rents that I believe are below market.

My issue: I'm looking to restart investment career by owner occupying to avoid that big chunk of down payment. Let's say for the sake of conversation the numbers work, my questions are:

1) How would I handle one of the current tenants? I imagine I would want to relocate the most unfavorable. How would I know that at this point, was my next question to myself.

2) Would I just say "Hey, you time is up, you've got to go."? (Obviously not like that)

3) Would I want to help relocate them? (the nice guy in me creeps up some times)

4) How would I go about raising the rents?

I had more questions when I woke at 5am this morning thinking about it, but I've forgotten some during my slumber. I'm sure I'll remember the rest later.

Thanks in advance.

Funny you ask this. I was just looking at some properties with my realtor and asking the same question. The last house we looked at had no basement, but a huge attached 2+ car garage. The others were tri-level with seperate garage, so there was really no storage. I'm interested to hear what others say.

I'm using the BP Buy 'n Hold calculator and I'm not sure how to calculate/get/guess how much for the following:

(I'm waiting call back from lender to help with closing costs but figured I'd post here in the mean time).

Purchase closing costs

Income Increase

Property Value Increase

Expenses Increase

Can someone help with some advice?

Thanks.

@Pat S. My apologies, my math was wrong. I was rushing to reply. Yes, per the listing there are 3 @ $625, 1 @ $600 and 1 @ $300-$600

I have no idea what that means, but $625 * 3 + $600 +$300 = $2775. So I assume one is renting for $325.

I'll check the article you posted.

@Pat S. I came up with $1525 ($625+$600+$300) I don't know why the one rent would only be $300. As noted in the listing $300-$600. I can only assume at this point it's what they call a 'garden apt' is being rented for $300.

I still don't know what Gross Rent Multiplier is or Scavenger Expense. Anyone?

Edit: deleted

Thanks again.

I keep meaning to go ahead and break down and upgrade my account. I will do so. I've 'tested the BP waters' long enough.

@Michael Seeker Thanks! How to find the CAP in my area? Realtor?

Assuming a CAP of 10 is good for my area (and their numbers are true), this would be a good purchase. They are asking $148,888

@Jassem A. Thanks as well.

Anything else I need to look at?

I'm throwing this out there so I can start to learn how to analyze deals. I've read a lot of the deals here on BP, but it's not as useful as posting personal info. I see this property on the MLS and I'm not saying I'm ready for such an investment, but I want to be knowledgeable for when the time comes. So here goes: (I'm not sure all the info I need to post for help analyzing, so I'll post what I see in the listing)

5 unit

2BD/1BA each (3 upper apts, 2 'garden' apts - whatever that means)

Rents: $625-$625 (3), $600-$600 (1) $300-$600 (1) I don't understand $300-$600 Also looks like the 2 garden apts are vacant

1 washer, 1 dryer coin op

Gross rent: $1525

Total Monthly Income: $2800

Total Annual Income: $33600

Gross Rent Multiplier: 5 (what is this?)

Tax Amt: $11,976

Tax Yr: 2012

Expense Year: 2013

Annual Net Operating Income: $15,423

Cap Rate: not listed

Electricity Expense: $456/Actual

Water expense: $564/Actual

Scavenger Expense: $907/Actual (what is this?)

Insurance Expense: $2,242/ Actual

So I have no clue where to begin to even evaluate this as a potential deal or not. I don't even know the questions to begin to ask. So, if you saw this deal, how would you evaluate it? What's missing? Rents too low? Etc.

Thanks in advance.

@Steve Foth

Thanks a heap!

@Ramon Jenkins

No prob. Good lookin' out