All Forum Posts by: Dustin Moore

If I make $10,000 in rent this year, but have $15,000 in expenses/deductions due to rehabbing, do I get some sort of tax credit for the $5000 that I’m upside down on? How does that work?

@Account Closed I look at deals all day every day lol. In my area it is VERY rare for a multifamily to be on the market, so this is the first one that I have seen. I’ve looked every day for 2yrs. It's frustrating really, because I'd like to start with duplexes, Triplexes, and Quads, but there just aren't any around. 

@Andrew JohnsonWow, lots to consider. Thank you! You do see $500 rent in B areas here in Mississippi. It’s the poorest state, with the lowest annual income. The nicest houses in town rent for $800. All apartments in town are $450-$625 (I’ve checked them all). I’ll check into the “units updated during every vacancy” thing. I’m working through an agent, so I haven’t spoken to the owner directly. I’m waiting on a response to see how old the roof is. It looks like it is in good shape, but I’m not certain. Thanks Again!

@John Leavelle Yes sir, it is two structures! Single Lot. I haven’t considered dividing it! Good thought! The cap rate for the area is pretty good. It’s a small town with small growth, but it is growing. The cap rate for this complex is on par with the avg cap rates of the area. There isn’t much appreciation in the area. Cheap houses, okay rents. Avg 3br 2ba = $75k. Rents for about $650.

@John Leavelle. Yes sir, it is two structures! Single Lot. I haven’t considered dividing it! Good thought! The cap rate for the area is pretty good. It’s a small town with small growth, but it is growing. The cap rate for this complex is on par with the avg cap rates of the area. There isn’t much appreciation in the area. Cheap houses, okay rents. Avg 3br 2ba = $75k. Rents for about $650.

Thanks @Colleen F. !!

@Thomas S. @Jonathan Klemm. Thank you. I am eager, but I have no issue walking away. I'll only buy if it makes sense financially :).

@Cody Campbell Thanks a lot! It is so easy to not include capital expense.

It is possible to increase rent. According to my calculations, I should be able to increase rent in 10 of the units by $50mo. That'd be an extra $6000 per yr! Rent market in my area is 450-750.  Of these units, some rent for $500, some for $525, and some for $550. 

Oh yea, The asking price is $499,000, but it has been on the market for over a year, and I think I can get it for significantly less! I'm thinking of making an offer like this.... 

10 Units - $21,000 unit

4 Units - $24000 unit 

Land Value - $45000

      Offer - $351,000.00

What do you think? Do you have certain metrics you use when constructing an offer?

Hello Chris. I say phone call. Break the ice. Don't start with a pitch because they may not want to sell. Do something like this when they answer. "Hello There! My name is Chris Pontello. I am interested in your home on (address). What can you tell me about it?" From there, you'll be able to feel them out. If they start babbling and spewing details, you've got yourself a good lead. If they don't, then you can spout out your 15 seconds of what you do and what you are interested in. If they don't respond to that, leave them with an "If you are ever interested in selling the home give me a call." Trust me, this will rattle around in their head. You did your part, and there is a good chance they will call you back in the near future. Best of luck!

About the units...

• 10- 2br1ba(built in 1975), 4- 3br1ba(built in 2002)
• single story, brick
• Taxes - $8,900 yr 
• Insurance - not sure 
• Great Rental History! 100% current occupancy. 
• Asking Price $499,000. 
• Avg Yearly Gross Income - $90,000.

The complex is in a solid B neighborhood. The owner wants to sell so he can relocate his investment efforts to another area (where he wants to retire.) I don't have any info on previous maintenance expenses, other than the write up says "units updated during every vacancy". What am I missing?? Be brutal.

Thanks for any and all feedback! You guys are awesome!