All Forum Posts by: David Fileger

Hey Kindrell,

     Congrats on finding this deal.  A couple points  Definitely be cautious of capital expenditures.  If the homes and duplexes are old, you're going to have to ramp up from income to make sure you are at levels to replace them in due time.  We've had to do that our condos. because we had low reserves.  If he owns 300 properties, like you say he does, then he is a savvy investor, so be cautious.  But also, since he's at the end of his career, he may be willing to give you some breaks as far as the loan agreement.  As some other have mentioned it's best to make three mortgages out of this.  His money will be the same amount monthly, but it gives you so much flexibility in the future to sell individually or refinance.  Definitely have a no prepayment clause on it.  That way, if you wanted to pour the profits back into one property, you could then refinance to a lower interest rate and use that money to pay off the second....then third

Just some input.

Also, is he selling any other places?  care to share a name?

David

@David Braylark Jr. in the condos that I own, I pay the utilities and put a cap on it.  It's more difficult to have the tenants pay because they have three other roommates and I usually match them.  But on a 2/1.5, if they are individually metered, they should pay those expenses.  If it's not metered for it, it would be worth investigating whether you can place meters on them.  (from the podcasts)  This would decrease your expenses and increase your profit by $850.  If this is something that you would be able to do, it may be worth waiting to refinance until after that is done.  Finally, is the price that you are using the offer price or the amount that you are willing to pay?  If it's the former, redo the numbers with what you're willing to pay.

Hey,

    Admittedly I haven't done any deals of this size, but I'm curious why you would refinance 6 months after only to realize the a 12 thousand dollar gain.  Won't the cost of refinancing and a larger interest rate eat that up in just a few years.  I would also be concerned from looking at the photo that you will have to change all of the ac units soon and likely all six in a span of three years when the first one dies.  Same with the water heaters.  How is the roof?  We just got ours done at our condos and they were 22k per building, yours looks like a 40k plus job.  

Will you be able to cut some expenses by putting caps on the leases, or making the tenant pay the water and electric bills?  Do you think you can increase rents a little?

Just some thoughts.

Best of luck.

We had a similar situation at a condominium in Gainesville where a pipe that broke on the third floor caused damages to the second and first floor units. Our insurance covered up to the drywall on those units. The first floor unit was attempting to sue but eventually dropped the case. We were close to filing lis pedens on that property because he quit paying the dues during that time. I think that may be about the time he dropped the suit. Also remember that when you sue the HOA, you are in part suing yourself. Any damages that you win may cause an increase in dues or a special assessment. What you may consider is getting on the board and making sure things are getting done right. This damage has been done, but the other buildings should be checked to make sure this isn't going to happen to other units.

David

Here are some of the new ones withing a 2 year time span. All of these have hundreds of bedrooms.

The Retreat  (used to be old student housing)

Lux 13     260 units (some of these are from an older apartment place)

Social 28  

The Ridge

Park Avenue Apartments (Santa Fe College)  298 units

The Grove

All withing two years and with two other student based apartments coming online next year

In addition, you have to remember of what properties are coming online.  When I purchased my first investment property, it was bringing in $475/month per room in 2009.  Then a new apartment came online and those rents dropped and haven't returned.  My places are getting around $415/month per room, and that's all inclusive in a 4/4.  Although it has still been a good deal financially, in retrospect I should have negotiated a better price.  

Just to let you know, There is a 10 story apartment/hotel /commercial building finishing up on 13th st and University.  Just across the campus on 1st ave and 17th street another 5 to 6 story apartment place is going up.  The University just purchased a property on 13th and University that will likely be made into student housing.  There is a commercial area on around the west 800 block of University ave that is empty and will soon be demolished for a likely 6 story mixed use apartments will be built.  Finally this past semester saw huge apartment projects on SW 16th ave close to 13th street that are geared towards students and another close to the new butler plaza on 38th terrace close to sw 20th ave that is all for students.  And at least 2 others on 13th street, whose names I can't recall  Be wary of these when you are projecting rents in your analysis.

Thanks for the help @Wayne Brooks I contacted Wendy at the law firm and she was very helpful.  I actually had their number in my contacts already which was odd.  Unfortunately, the property I was looking at paid off the taxes so it won't be going to auction.  The grind continues.

I need to discuss a potential tax deed purchase with a law firm that specializes in quieting the title.  Who have you worked with that I can call?

Thank you,

David

Florida, Gainesville, Tampa, Jacksonville, Miami, Orlando, Tallahassee

@Edgar U.  Agreed.  the locations I gave are starting points.  One still needs to go look at the area.  to be comfortable with the purchase.  There are some some duplexes currently being sold that are not far from campus, and nestled in a student area that aren't being touched presumably because of the crime rate.  They even claim to bring 8% cap on just one side of the duplex.  If I recall there are three or four that are being sold.  I think it's an opportunity for someone who can perhaps purchase them all and revitalize the neighborhood, but it's really going to be a project.

Hi Andy,

     I don't know of any wholesalers in the area.  I'm really just now getting a little more involved in the community.  As far as good places around the campus, it's getting really difficult.  Like Terry said, whomever is in charge of building permits is having a field day.  Right across from campus a new 10 story monstrosity is being built that will be a hotel/apartment/commercial area.  By my places on 20th we had a 700+ room apartment come live last year and another 1,000+ coming in August, so who knows how that will affect my rental prices, although I should be over them.  As far as what the guys on the podcast were doing, (adding value to properties by adding rooms)  There may be opportunities in the old student ghetto area let's say North of University Ave, west of 6th street up unitl 13th and perhaps a little west.  any further west and the homes begin to get pricey.  you will still want to go check these places out, as they aren't in the greatest neighborhood but that is slowly changing.  

Anything south of University Ave and East of campus would be good if you can get one.  but there has been a lot of change over as they are tearing down old homes and building apartments.  There has been some opportunity west of 34th street and north of university ave with foreclosures.  A little far to bike comfortably, but most would get a scooter to uf.