All Forum Posts by: Daniel J.

@Ben Leybovich Not having it replaced or septic at all? I have septic at home so I’m familiar with it, and my taxes are far less because of it.

@Ben Leybovich

I am currently looking at a triplex with a detached garage apt. It is in the Spring, TX area just north of Houston. It is currently owner occupied, with 2 units rented long term, and 1 unit used for AirBNB, I would not continue doing AirBNB. I would NOT owner occupy it. My agent believes that it could easily all told rent for $4,300 a month, possibly more. It is currently set up for owner paid utilities. Shared laundry between all 4 units. I would be purchasing this with a partner who is fronting the down payment. Long term plan would be to refi out in 6-9 years in one manner or another and repay my partner plus 5%. It fell out of contract previously because of appraisal issues. Contract for $336, but appraised for $300. The owner who is an agent felt the comps were poor comps as the property is somewhat unique. We have seen the appraisal and my agent overall agrees that they are not the best comps. It was for a VA loan.

Purchase Price: $315,000

Loan: 30 Fixed at 4.875, 25% down

Rents: $4,300 (conservative but reasonable)

Utilities: $7,000 (Based off their actuals plus some fluff)

Repairs: $2,000

CapEx: $3,600

Vacancy: 10% (Somewhat a shot in the dark, I can't find any good data for the area)

Taxes: $7,000 (Current tax rate times the purchase price)

Management: 11%

Cash flow with PM: $347.50 per month

Cash flow no PM: $773.20 per month

It is on a well and septic. From a previous contract they had the septic inspected and the inspector said they needed a larger system. The current owner said they have had no issues, and have only had the tank pumped once while owning it in 3 years. Both my agent and I feel she is trustworthy. Granted everyone is biased towards themselves. It also has about 3-4 years left in the roof. 

It is on 3 lots, part of the negotiations with the previous contract was to lose the 3rd lot, and have the septic replaced, they had a negotiated price of $336, which the owner said she didn't want to go lower on. The other option if you didn't replace the septic would be to buy all 3 lots. No current use for the 3rd other than nice lawn. If you don't replace the septic you need all 3 lots as the current drain lines for the septic run onto it.

Am I missing anything? What do y'all think? It seems like a pretty good deal, though not perfect. 

Thanks!

Daniel

Does anyone have experience with some of the longer term private lenders for buy and hold such as Colony American Finance or Lima One? There seem to be very mixed reviews from a couple years ago, and I can’t find much recent experience.

Thanks!

@Joseph Gozlan Well we paid $210 haha! Though we did get $25k from the seller to do electrical work. It was valued that way because it had only one owner since 65 and it was over65 and homesteaded.

Ok thanks!

@Joseph Gozlan ok, thanks! I’ve been using 100% because I had my home we bought last year assessed from 65k to 207k, and the service I hired (supposed to be the biggest and most successful in Houston) said sorry they couldn’t get the value changed. 

@Michael Le @Joseph Gozlan Are y’all using a 3rd party service or are y’all appealing it yourself? 

@Samuel Bavido That’s true, thanks! I don’t have any firm numbers, though I think I’ll pass. I would be using a contractor

@Sean Walton That is true, I’m not sure it’s actually worth much haha. I think the time stress would be too much on my family in the end though. Thanks!

@Graeme Ford That’s a great perspective, thanks!

@Ben Leybovich Thanks again Ben!

@John Casmon That is true! That’s why I started with the path I did, just checking to make sure I’m on the right path!

@Jeff Kehl That’s true, thanks!