All Forum Posts by: Drew T.

Hello,

-I cash-out refi'd a SFR approx 3 months ago. Had a unsolicited buyer approach and make an offer to buy my SFR last month. I accepted the offer, Purhcase Agreement has been signed. Can I still do a 1031 exchange, or reverse exchange depending on closing date, into another RE investment? If so, does the Cash-out refi my costs basis...from my understanding no, didn't invest any of the cash to improve the SFR.

- My current costs basis is around $94k (without the cashout refi affecting costs basis from my understanding). Property sale is $165k. Mortgage balance after cashout refi ~$127k, so I would have ~$38K cash after payoff. However, with my tax liability based on the current costs basis of $94k. Can I take some of my cashout refi money as part of my 1031 exchange investment to invest all of the "proceeds", so I don't have a tax laibility after the 1031?

Thanks

Thanks Jaysen, appreciate it.

So, the property should be priced closer to $500-$550k, have no management fee, putting 10% down, then it seems to be worth it.

Can't forget that $150/month in quarters from the laundry, tax free : )

Hello,

 I currently own three single family rental properties, for the last 5 years. I've saved money and have been searching for additional properties to purchase in my area. I have a mutual friend looking to sell a 12 unit apartment complex, due to his age. I'm new to commercial type properties, so any help would be much appreciated. The property has been updated over the last 5 years: New cabinets, tub/showers, doors, paint, countertops, sinks, trim...etc. New 30 gal water heaters in each unit. New shingles in 2010. New commercial water softener for the whole building. New aluminum siding in 2005. Property was built in the mid 1970's.

12 units: 9 one bedrooms, 3 two bedrooms.

Gross rent: $6515 (room for gross rent to be moved up to $6600, due to 2 units having lower rent)

Additional income: $150/month for laundry machines on property

Taxes $7868

Ins  $5816

Only utilities paid by the current owner is water, which runs him about $300/month for the whole building. Garbage, which is $90/month. Hallway lights and entry way light electrical run $125/month. Lawn and snow run about $125/month.

Local cap rates are 6% up to 10% on properties of this type

Vacancy rates for the county on units of this type is 5%, over the past 10 years. (very small, about 3,000people, central US town on interstate, with a state college and city of approx 60,000 within 15mins and another liberal arts college and city of 15,000 within 10mins).

No management fee, as I'd take care of the property

Monthly repairs, I usually set this at 12% ($700-750)

Asking price $600,000

I've been approved for a loan at 5.09% (5/5arm, 30yr am., $1500 closing fees), given the option to put as little as 10% from a small community bank. The seller has given me the option for them to carry the down payment of up to 20% of the purchase price at 5.25%, am over 30years.

Each unit is currently rented on 1 year leases.

What else should I be thinking about before making a decision on this property? Thoughts on the quality of these investment numbers?

Appreciate the help!

Hello all and thanks in advance. I've posted on another forum, not necessarily a forum for REI though and got mixed answers. I've done some research but also get mixed answers, so please set me straight.

I've researched a single family home, rental property in my town. It's currently being rented for $1125 by the landlord and admittedly he says rent should be closer to $1200, which is what the market bears he said and from what I've seen, would agree.

I've reviewed the following expenses. $56.25 (5% vacancy rate exp), $112.50(maintenance) $70.42 (ins.), $120 (taxes). Total expenses $359.17 or ~32% of rent. I didn't include utilities because they are charged to the renter.

From what I've read, the rule of thumb is between 45-50% expense of rent. What am I missing here? Am I underestimating vacancy (landlord has had 15 properties in this town for 25+ years and says his vacancy averages around 5% or less) or maintenance?