All Forum Posts by: William Collins

@Margarita Reyes  the property system I am using (Cozy) lets you automate the late fee. I charge $75 on day 11 of the month if not paid.  Due to some folks pay schedules they always the late fee. 

@Anne Cullen  I own 6 duplexes in the town, and can give you a neighborhood by neighborhood view if needed.  I like the town as it is also the edge of the commute range for UConn students (25 minutes to campus).  So if they are going to university and doing an internship it is a good middle town.

Working on a small package deal in Manchester, Connecticut. Here are links to the small package:

https://www.zillow.com/homedetails/244-Main-St-Manchester-CT-06042/2131361600_zpid/

https://www.zillow.com/homedetails/250-Main-St-Manchester-CT-06042/62540720_zpid/

These two properties are joined together in a deal due to parking for 250 Main being directly entered through 244 Main Street.  The combined purchase  was 290,000 funded by private money.

250 Main Street purchase $145,000

Rent roll $1541

250 is a 2150 sq foot  2x 1 Bedroom units.  That's right 1000 sq foot 1 bedroom apartments. Both are currently leased until April/ May. And the combined rate total is $1541/ month. These units will easily be converted to 2 bedroom apartments and per Bigger Pockets Insights  the rents would easily total  $1250 for a 2 bedroom ( we underwrite as $1100) or $1350 for a 3 bedroom ( we underwrite $1250).  We anticipate approximately $15000 in turnover and revamp costs. Separated utilities, natural gas and furnaces all functional. https://www.biggerpockets.com/insights/locations?validated_address_search%5Baddress%5D=250+Main+St%2C+Manchester+CT&validated_address_search%5Bbeds%5D=2&validated_address_search%5Bbaths%5D=1&commit=Search+address

244 Main Street purchase $145000

Rent roll $79

244 Main Street is a vacant mixed use building with 2500 sq feet of space. First floor is an office set up. The second floor is a vacant. It is later out as a 2 bedroom right now. It also has a 3 car garage. The upper floor will be easily converted to a 3 bedroom unit with some layout alterations, not even moving any walls, just some doors. All of the HVAC for are online and functional, natural gas split utilities.  The office space we are getting permission/ hardship to convert to a 3 bedroom unit to make this a 2x 3br unit. The garages need new doors and lighting but should rent for $100 each. Budget is $35000 with over run up to $50000.

So at the end here should be the totals low end

Combined Value start $290000

Combined Value end $475000

Combined rent roll start $1600

Combined rent roll end low estimate $5000

2x2br 2200 2x3br 2500 garages x 3 300 

Hard Money monthly carry cost $2200

Financed at the end $356000 for 75%

Purchase plus rehab costs $340000 to $355000

Financed through local lender at end 20 year 4% costs $2,157

Here we go with a fun challenge- I think New Britain has appreciated so much that duplexes that are not owner-occupied are just not worth it. This town, which is made of mostly rental properties has grown so much in appreciation (imagine saying that 10 years ago) that the cash on cash return is just not there.  Combine the rents (which are decent) with high: taxes, water/sewer, and a 40% insurance premium- that I do not like the town for anything other than really good 3 families and up. 

What are you thoughts?

1) Furnish common area- not bed rooms-if house hacking.

2) Use smart locks if you need to- change out easily.

3) If your living there- how about cleaning it?

@Dorian Yanez  Congratulations.  What market for your condo's are you doing?

What was the best part of the deal?

What was the worst?

How did you vet your Condo Association before buying there?

@Jonathan Craig

@Jonathan Craig  Rent by the room would be great in specific towns to maximize your return.  Do the separate leases and line it up like that.  

2) Build in the costs of expenses like utilities.  Don't try to split it out, as that won't work.

3) Use a programable smart home thermostat- program it to alert you on issues.

4) Provide a Washer and Dryer for use, and set up ground rules- move your clothes through.  This is big- make sure people treat their home (which their room is) as a place that is clean and neat.  You should also have a dishwasher with detergent and a rule- all dishes cleared up.

5) In general run this like it is an Airbnb.  Keep it nice, and clean.  Make the common area's friendly and sharp.  Help your tenants keep clean by making it so they can clean as lazily as possible (provided: washer, dryer, dishwasher, vacuum, a plunger in each bathroom).   Take your "coat closet" and make it your cleaning closet.

6) Get kitchen gear that is easy to clean (dishwasher safe) and matching, with spares. 

1) 

The 1 thing: House hack if at all possible. It will teach you land-lording, property management, and maybe even a little construction while minimizing your expenses and building an asset. Heck you could grub hub your way to your 1st downpayment for an FHA.

@Tracy Dear if I was self managing I could now, but I like my job. So right now, I am saving in my 401k and maxing out my HSA. I am headed for fat FI, so I can do everything I want.

@Chirag Gulati the biggest single drag I had was having things not aligned to the strategy. We flipped three houses and frankly the slow down that made on our multifamily BRRR strategy was tremendous. Looking at trying to get another 7 units possibly by the end of the year.