All Forum Posts by: Diem Tran

@Brandon L. No, I did not make a purchase yet. But I was looking at Phx because I thought it was a market yielding 9 or 10% CAP. Now I don't know if thats true or not. Phx caught my eye as I was browsing through loopnet. I saw alot of properties listed with higher caps than the measly 5 or 6% in Miami. But since I live in Miami and never owned any Multifamilies yet, everyone is suggesting I get my feet wet and learn from something near home first. So now Im still in the Miami market looking everyday but haven't found anything yet. I swear theres nothing good to buy here. Everything is overpriced. Im beginning to look like a tire kicker.

@Tom Scott Thank you for starting this discussion!!! You took the words right out of my thoughts, of course, you put it in writing better than I ever could have! I, like you, have a full time job, and would like to invest also.  My problem is that I wouldn't know where to start with a distressed property anyways. I'd probably end up spending more money on the rehab than paying retail price on a turnkey.   So I always thought then "what's wrong with buying a turnkey retailed priced multifamily property?"  Am I wrong to think that I could pay a little more now, settle for less cash flow for the first few years, and raise rents from year to year and then benefit from there?  Am I doing the math wrong? 

Anyone with suggestions or advice, please chime in! Thanks

Hi Everyone,

Anyone familiar with Irving, TX?, especially zip code 75060?  Would you invest in apartment properties here for buy and hold?  I would love to here your thoughts and opinions.  Thanks in advance! 

@Chris Kennedy The units are all on one lot, one parcel number, and seller is selling all.  Best way to describe it :  Four small houses.  One house has a one bedroom, and attached to it is a studio.  The second house is just a small  two bedroom house.  The third and fourth house is just one bedroom house each.  I've never seen a one bedroom house before.  But anyways its four separate houses or buildings.  Each building is quite small,  2940 sq ft TOTAL for all four buildings.  

Whats your opinion, is it the same price to replace one 3000 sq ft roof vs 4 buildings whose total sq ft is 3000?  

Also, if the roofs need replacement at $18K, how would you take that into consideration when making offers since CAP rate is only based on NOI over selling price? And the last I checked, capital expenses are not included in NOI.

Thank you!

@Jeremy Tillotson Thank you.  I will email the photos as soon as I take some.  As for winter in Miami, its super here.  We're in shorts, tshirts, and sandals all winter long, except last weekend.  A coldfront came in and we were freezing our butts off.  It was like 67 degrees and I don't own any regular long pants!!!  Two whole days but lucky we're back to normal now at 80 degrees. lol

@Jeremy Tillotson I forgot all about vacancy percentage.  I guess because the property is currently 100% leased and I was thinking that this area is overcrowded so that shouldn't be a problem. Thank you for opening my eyes a little more.

 So, even if the seller accepts an offer of $290K, with lots of deferred maintenence, this deal is not that great anyways right? 

Thank you.

@Greg Carr That would be $25 more average per unit.  Total would be 150 more per month, from 4300 to 4450.  As for rehab/repairs needed, my guess would be that there's probably more rather than less needed.

I thought about asking the RE agent for comparables, but I think I would be better off getting them myself since anyone could present me with only comparables that make this property look like a good deal?  Which leads to my next question, how would I go about getting comparables myself?  

Also, should I expect 10% CAP in Miami? Is that reasonable? When I was searching in other states, I often see 10%, but I, myself rarely see anything more than 8% in Miami. Thank you for your response, I love to hear your thoughts on this as well.

@Lee Smith @Steve Yoo @Steve Olafson @William Yeh @Chris Winterhalter @Xavier Allen @Michael Tempel @Brian Faulkner @Ricardo S. 

  Thank You!

Today I looked at a 6 unit property.  I like it alot but who cares what I think or like, especially if I never purchased a mutlifamily property before.  I learned that the numbers matter the most.  Please give me your opinion. The following is what the RE agent gave me:

* 6 units total.  1 two bd, 4 one bd, and 1 studio.  Building size total is 2940 SF, although there are four different buildings on 21,000 sf lot.  Since there are four buildings on the lot and ample room, the RE agent suggested that new owner could add fences, thus the individual units or buildings would each have their own back yard.  It becomes an amenity and therefore rents could be raised a little bit.  

* built in 1953,  from what i can see from the outside, the roofs are pretty ratchet and needs major repair, if not complete replacement.  My guess new roofs would be 18K????

* property is in  zone, in my opinion.

* actual rent is $4300 per month, 51,600 annual.  Seller says a new owner could raise total rents by $150 per month.  

*expenses are the following per month

landscaping 100

water 100

mgmt fee 310

prop taxes 335

insurance 207

repairs 200

total is 1197 monthly, 14364 year

* NOI 37,236

* CAP rate at selling price of 420,000 is 8.87%

There is no electric bill and the property is on a septic tank.

The above numbers is supported  with management's monthly report to the owner.

If I'm to underwrite this, is the monthly repair amount too low in this case?  If so, what percentage should I use for a property built in 1953 and looks like there are some deferred maintenance.   Also I don't see a reserve for capital expenses. Should it be included in the expenses? 

Am I missing anything? or should I be aware of something not mentioned? 

Thank you in advance!!!!

Hi,

I'm guessing the best way to get the cost of renovations in apartments is to get quotes from several contractors.  But of course, you will need access to the property, or be in due diligence, etc, etc.  But what if I'm not in that phase yet?  I'm still shopping and sometimes I ask "How could I effectively submit an offer without knowing the cost of renovations?"   I've asked theses questions  before, and I always get an answer like this, "Well it all depends.  I have to look at it first."  I was wondering if there is a book or something? Thank you!