All Forum Posts by: Josh C.

@Jeff Berlin we think we do a good job at City Place. Been doing it a long time and do a little investing ourselves.

As far as repairs go sometimes things do suck and are expensive. If replacing lots of pipe in a crawl space or even worse underground 4K could be a good deal. Now if that just some small spot repairs it could totally be a rip off and that does happen.

Good luck and hopefully you’ve seen great equity growth since that time. It was a smart/lucky time to buy back then. We all wish we bought more.

@Marcus Auerbach

Automation is definitely becoming more and more prevalent, but still a small percentage of actual manufacturing is automated in my opinion. This picture you showed is a new shinny line. Not typical. I sold industrial automation products for 10 years prior to real estate and from Missouri to Ohio anyway stuff is old. Super old. Push buttons and relays are doing much more in factories and then the PLCs and HMIs I was selling. It costs millions and millions of dollars to upgrade a single line let along a whole plant, so just like real estate they just limp along to save huge cap ex and fixed 1970s Nema rated equipment instead of upgrading to newer. Demand for cheap unskilled labor in almost every factory I ever went to except a few of Pharma places was very high.

I do agree with you that finding those people was hard. But need was great. Engineers (which I am, or was) just went to meetings and clogged the system up with unnecessary safety procedures. The blue collar people really did do all the work with very little training in most cases.

Highly recommend if you can take the losses or offset your gains if you had a great year. From my experience the studies cost around 4K, and you get roughly 50% of your purchase price as a deduction. So a 2MM building gets you 1MM this year reduction. At least this has been my average over the several I've done. I think this is cleaner and easier than a 1031, as you don't have to sell anything and deal with the same LLC if it owns several assets.

Also they are being phased out now so this year is only 60% of value. Next year is 40% unless trump changes that.

I think it’s hard to make good money selling 4 bed houses new construction house for 380k. Maybe Florida is different, but not a lot of new construction (unless a bigger neighborhood) one off type house sub 400k around me. Closer to 700k or so. Good luck though if you ca. wholesale to a builder.

If they can be bought for 30k cash, paying 53k+ might be a tough sell though.

@Ryan Treacy

A renter wouldn’t have their own agent so that won’t work. Our market typically doesn’t involve real estate agent to show rentals unless very high end. But there are companies out there that will just place a tenant for a fee of anywhere from 1-2 months rent. We aren’t one of those so not trying to plug our company, but they do exist.

Good luck!

I can’t tell if you are trolling or not. Your plan is to buy an owner occupied and live with sex offenders for a year then going boating? If you are for real I do not like that plan, I do not like it at all.

So many liabilities there, also many moral concerns. Also, you won’t find a manager for that property that allows you to boat around world without a care. You can’t send some cleaner lady into a home like that blind. Even rough necked plumbers would need paid handsomely to deal with that if you can even get them to come.

Not sure you could even get that financed.

Lots of liability.

@Paul Scammacca

Man when did $140k a year become low income? But as others said your income with the rentals should go up and DTI improve not go down

@Lambros Politis

You are right. Way too modest for almost everyone. I was just trying to give an example of getting the numbers you mentioned and what it took. Completely rehabbed place like ours described is in the 6-8 cap rate realistically. Also, we just (this month) have it fully leased so don’t have accurate trailing 12 to verify my expenses, I haven’t had it appraised and said that off the cuff.

@Lambros Politis

40% expense ratio is realistic for class A or at least B+. But then your cap rate will be lower. Unless you do a big value add you just can’t find numbers close to what you mentioned for a “safe” asset.

We just finished a project that we consider a good deal and it panned out like this. Purchase 600k, rehab 1MM, gross rents 275k. This took over a year to complete and we acted as the general contractor and were on site more days than not. This is the only way I know to achieve these results. It’s a full time job (literally it’s my job) and we will self manage and probably be at 35% expenses (which is a little lower than normal as we already took care of all the capex for 5-10 years)

To buy this building turnkey would be at least 2.5MM if not more.

In Indianapolis we perform this work for clients and they do a little better than market, but still have to pay a GC (us) for a year of our time plus their interest or opportunity costs on having so much cash out for that time period. Usually this setup is a better deal than buying turnkey as you don’t have capex lurking over you, but it’s still a headache as anything worth anything is.

Not trying to burst your bubble or anything. Just wanted your plan to be realistic. Good luck!

My guess is it’s illegal to rent out rooms in a house you don’t live in. Typically, if you live there you can do anything you want. You can even discriminate against anyone for any reason. Example: a female owner can advertise they only want a female tenant.

I’d double check that he doesn’t fall under an exemption as people have lived with roommates forever. Pretty much guarantee any city won’t come after him for asking for money from a roommate.

I would recommend getting the insurance updated.