All Forum Posts by: Brad T.
Brad T. has started 24 posts and replied 160 times.
Post: Why do rent amounts vary so much on multi-family?

- Investor
- White Lake, MI
- Posts 165
- Votes 41
For this deal, I would use the average rent to calculate the deal. I would say the reasons below are part of the variation. You would be surprised how much rents can vary even in the same building.
- Lazy property manager that hasn't raised rents fast enough, maybe they don't want to lose good tenants, maybe they don't want to find new ones
- Some units have a better view, are upgraded, or have nicer features of some kind
- Maybe some include water or heat and some don't?
- Time of year leasing as you mentioned
Post: New Goal: Purchase 400 units this year

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Good luck, @Chris Shepard! Very motivating goals and plans!
Post: Building a 3 or 4 bay garage to rent

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Hi Eric,
You got it! That is why this makes so much sense. Just add some expenses like maintenance (5-10% of rent), taxes (since they will go up for your rental a bit), added insurance, and electricity. You should still be over 15% ROI. Imagine if you refi your rental and only have to put 25% down on the garage, you can probably get 60% or more ROI!
Best of luck!
Brad
Post: Building a 3 or 4 bay garage to rent

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Great idea, Eric! I have been considering the same strategy for future rental purchases. I like the idea of having a captive audience of tenants and the mix of apartments and storage units. It should be a pretty easy ROI calculation.
From my very limited knowledge of storage units, smaller units rent for more dollars per square foot, so they should have a better ROI.
Post: Multi-Family property value

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Also, I don't know about your area, but in Michigan, the taxable value and state equalized value are 50% of the actual value of the property. So if you have a $100K market value property the taxable value and state equalized value will show up as $50K.
Maybe your 170K assessed value is really $340K market value? Still way under the listed price, but closer.
Post: Cashflow statements on performing properties

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Off the top of my head, you are missing the below items. Obviously, you need actuals once you find a property.
- Maint and Repair, 10% of income is a good starting point
- Vacancy and credit loss, if the property is run well, 5% is a good starting point
- Utilities
- Advertising
- Legal (evictions, lease advice)
- Tax prep
- Property management placement fees (usually 50-100% of one month's rent)
Post: How objective or subjective is apartment classification (A,B,C)?

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Great question and one that I have struggled with also, Nick. So far, I like the way Axiometrics defines the classes best. It lets renters determine the class by how much they are willing to spend to rent the units. You can use a website like rentometer.com to check where a unit ranks.
A Class = Top 20% of rent price in it's area
B Class = 20-80% of rent price in it's area
C Class = Bottom 20% of rent price in it's area
Post: New Member from Metro Detroit, Michigan

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Welcome to BP, Lisa!
Post: Property Management Fees 12 Unit Apartment

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Thanks everyone. Your info has been a great help. The best guy I have been working with has given me a quote of 8% of collected rent plus 50% of one months rent per new lease. I think he will do a great job and I feel this is fair compensation.
Post: Inspection Day!

- Investor
- White Lake, MI
- Posts 165
- Votes 41
Very exciting, good luck Jo!!