All Forum Posts by: Chris Svendsen

 It is possible to rent one more unit without much work needed but will be lower class rental.  No pets in building so that's a no go.  Did get word today that total rents are 3240 right now so at least a little better.  Once I get the actual expenses on property over last couple years I should have a better handle on what I can expect from this.  My agent is very clear on his feelings that this is to good of a chance to pass up being these almost never come up for sale.  He also invest in real estate but has gotten out of rentals as he just didn't care for headaches so do feel he has a good insight into this.  

thats amazing.  Great work.  Off to a good start and some fun life experiences by the sounds of it.

Thanks Matt for feedback. ARV is hard to predict as these units rarely come up for sale. In last 6 years only 2 been up for sale. My goal is the cash flow so i have been back and forth on value part of equation. I know exactly what you mean about being woried. Thanks for feedback, much appreciated.

I used PenFed credit union for a house I have in Virginia.  Take a look online, think they are nationwide 

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*This link comes directly from our calculators, based on information input by the member who posted.

My realtor got a listing for an 11 unit apartment building in an area where these rarely come up for sale.  This building is setup for low income housing right now, tenants have very low rents and landlord includes heat for everyone and covers electric for half the people.  Of the 11 units they have 7 rented, average rent is only $442 a unit.  As it sits now i will make almost zero cash flow on property but can greatly increase rents with a full rehab.  To be conservative I am basing numbers on an average rental amount per unit of $600 a unit, and  believe can increase unit count to 12 to 14 units but that is not in my numbers at this moment.  A fully rehabbed building 3 blocks down from this place is advertising 1 bedrooms for $875 a month and 2 Bedrooms at $1295 a month so my $600 a unit should be easily attainable. To reduce my cost on building I have quite a few changes planned. 

First is tenants pay electric for all units.  All units have separate meters but not all wiring is isolated to each unit on the lowest level.  Will correct that and switch these over to tenant pays electric.  That should help out to increase cash flow.

Second is I would like to zone out heating system for building by floor.  Last year the owners had to replace the 50+ year old boiler.  Thankfully, in an attempt to reduce the heating bills, they had a multi stage heating system installed with 3 identical boilers feeding into each other.  They did not zone out building but I would like to redo it so that each unit heats a floor, that way I can control temps better.  As it is now, one thermostat is for all 11 units.  Some were very warm in the mid to high 70's, others were in high 60's.  May even meter back the heating bill to the tenants but that still in air.  Old system cost about $1200 a month for heat but this season so new they do not have bills yet for new system.  Owner working on getting me all those numbers. I hope there is a good decrease in cost as new units are high efficiency BOSCH boilers compared to the massive old behemoth that is a permanent fixture in the basement.   Amazing the difference 50 some years makes.

Third change is installing electric water heaters in each unit.  Currently they have 2 large gas water heaters feeding the entire building.  Saving the gas bill on these will help lower my cost and move it over to the tenants.

Fourth change is going to be working to rent out the vacant lot next door that comes with building to a repair shop down the street who wants to use space for overflow parking.  Not sure what I can get for it but would think an additional $250 a month is a realistic number.

Well, I think that is everything.  The goods are the building has new heating system, newer rubber roof with 3 years left on warranty, updated electrical wiring, copper and cpvc plumbing feed lines.

Bad is lots of cast iron drain lines to replace, lots of work necessary to get units to a proper standard of living, and having a trucking yard close by not ideal but still should be able to bring up rents considerably. 

Let me know your thoughts on numbers in report.  Have a family member who is contractor who is my repair guy, and will be self managing building for immediate time with help of another family member who lives in area.  Once get empty units rehabbed and rented then will most likely move over to a management company.

Working on running numbers now in calculators.  Will post up in a new topic but here pics of property if anyone wants to see.  Rough is best word to describe but a rare opportunity in this area. Last building to go up for sale was an 8 unit in 2015 and sold almost immediately.  In the area this place is lots of low income housing which for some reason means low standards of living.  Believe with bringing standards up, even lower end of market can still make some good cash flow once all renovated to my standards.  Lower income people should not have to live in low quality housing. 

well, that was interesting.  Amazing what people willing to live in.  Eye opening experience but still a possibility.  Is a mom and pop operation with mom doing all the work. 20 years of minimum interior work done other than wiring updated.  Exterior good shape. 4 vacant units of 11 units.  Those 4 need complete rehab to be where I would want them and to attract a higher quality tenant base.  

Positives are newer roof still with 3 years of warranty left, new boilers, electric broken up to each unit, exterior of building good shape, structure good, most all windows have been replaced, newer water heaters. Tenants pay electric on 2nd floor and 3rd floor.  1st floor owner pays due to units improperly wired and not completely broken up per unit.

Negatives are ALL units need rehabilitation.  30 plus years since any real work been done on units.  Current landlord renting to bottom of market.  Would renovate top level to make 3 or 4 units and then rent those out.  Once those done start working my way down.  

Multiple options for revenue increases though.  Comes with a vacant lot beside it so can bring in some income by leasing out to company accross street for additional parking.  They already have asked multiple times to current landlord for that so could bring in some cash.  Increase rent on turned units.  Zone out heating system and charge back heat, put electric water heaters in each unit and have tenants pay electric.  Possible to make furnished rentals for hospital on other side of bridge for traveling nurses.  College student housing is possibility.  

Current owner very open with info.  One unit behind on rent as tenant was giving owner partial payment while we were there.  Probably needs evicted but supposedly be all caught up next month.  Will see.  They are going to get me utility bills, insurance bills, tax bills, and anything else they have in next couple of days.  Once have that will know how I can proceed.  

Another option is they can go to your bank and deposit cash into your account. My bank lets my tenant come in, provide name of the business and they will take a deposit and put in account.  They do not have any ability to make withdrawals or anything, just put money into my account.  Worked great for 6 months then they asked if could pay Venmo and switched over to that.  

After looking at place this weekend, if it looks good I will be calling bank first thing Monday for sure.  Without reasonable finacing I be out of market.  I am hoping that since already have one property with them and that they do in house financing I have good chance of getting something attractive.

 Thank you Diana.  I am not quite up to big deals yet but hopefully some day soon.