All Forum Posts by: Danny Colacicco

What percent of rental income is approriate for maintenance, repair, capex? management fee?

it did include insurance but it didnt include the others. I assume the investor manages there own property, capex could result in higher rents if you are upgrading the property so this could potentially be offset, and maintenance I believe is way to variable to account for.... are these normally included in the calculations?

I just calculated as:

[annual rents - fixed costs (taxes) - variable costs (avgs provided by seller for water, gas and electric]/(negotiated price + my fee)

I dont believe im missing anything in calculating the cap rate?

So in seeking wholesale deals, I came across an investor looks to sell two apartments with 5 total units in a decent area of Baltimore (Greektown). All of the apartments are currently being rented, however, when viewing them, the apartments were dated/not in the BEST shape and the tenants (not all) had very poor hygene. Nonetheless all teneants have been living there 1.5-4 years and do not want to leave. I have negotiated the property to a cap rate of 12% (after taking out all fixed/variable costs and my fee) but I am still weary of putting it under contract as I am nervous that I wont be able to find an end buyer given the condtion of the property/tenants?

Can anyone give any advice as to how they would proceed with these? Would you put them under contract?

Thanks in advance for the advice!

Thanks for the fast response! How would we approach the agent in regards to assignment if we wanted to avoid having to a double closing?

When I purchased a house there was tons of paperwork to sign as opposed to a standard two page contract that is used with a FSBO. Just worried about assignment when the agent and all that paperwork is in play.

As a follow up question, we arent able to just do the deal ourselves and go around the agent are we?

Hey everyone,

We did a direct mail campaign to out of state owners, and we got a call from someone who has had their house listed with an agent for 5 months. It was originally listed for 275K and now is it at 225K. My first biggest concern is that since it is listed with a realtor that I loose the bargaining chip of being able to close with no fees. My second concern is though they said it is in good shape for an 1850's house (new floors/paint ect) that they may think that my being able to purchase "as is" is not that big of a bonus. Nonetheless, assuming they are motivated, how should approach this? They game me the contact info of the listing agent. Should I call him to set up an appt and explain to him that one of my partners will be purchasing the property and assure that the contract used is assignable?

Thanks in advance for the advice!

Maryland Properties 2020

Hey everyone-

I have already developed a solid buyers list and have been doing a lot of marketing to get sellers. In doing this, I have been getting calls from other wholesalers asking me what kind of houses I am looking for and my preferences. That is, they are also wholesalers looking to build their own buyer list. What I have told these individuals is that I am also a wholesaler but if they bring me a good deal, I will reveiw it, and I will be able to get an end buyer. In doing so, we would split the profits 50/50. My two questions in regards to this are:

1. Should there be a contract drawn up between the wholesaler finding the seller and I stating a 50/50 split (like perhaps a double transfer if that even exists?)

2. How do I avoid having this partner just going around me for any subsequent deals to a buyer used in a previous deal as to avoid having their profit cut in half and sharing with me?

Thanks in advance for the help!

-Danny

MarylandProperties 2020 LLC

I am a young professional recently re-located to Baltimore for work. I work at Morgan Stanley in managed money middle office operations. I have my Bachelors degree in Economics and am a few months away from finishing my Masters degree in Finance. I purchased a home earlier this year in Glassboro, NJ and 2 blocks from Rowan University. I did some renovations to the property and am now renting it out to 5 Rowan University Students. While I love my job, I ultimately want to grow a career and a business investing in real estate. In the meantime, I would like to find a mentor who is already successful in the real estate community. I want to become actively involved in Baltimore and learn more so that I myself can grow. Please contact me if you are in the Baltimore market, as I would love to learn and assist. I am a motivated bright individual and I know that I would breing a lot to the table!