All Forum Posts by: Account Closed

@Roy N.Thanks Roy, makes sense.

Pulling out actually though, in a high risk flood zone..has a LOMA from 2013 but area is under review again per FEMA...Insurance would be thousands of dollars per year + concerned about resale

@Roy N. thanks again...that is the scheduled rent...I've been using 5% vacancy as that is roughly what it's been on my other properties.

I don't quite get the capex thing though. Whether it's a line item off the noi or listed as an expense isn't it the same effect on monthly cash flow? I'm still putting that percentage away right?

@Roy N. thanks but I included the taxes and ins as an expense and I'm putting about 25-30% down so the mortgage payment is about half of the 800-1000 you mentioned.  Sorry if I wasn't clear there

@Eric Munson I use to live in CT are you related the the munson chocolate shop in Northeast CT :) thx for the input 

Purchase price 180k, closing costs about 6k, initial repairs roughly 5k (based on review by my property manager/inspection)

Annual income total 39,300 

Tenants pay own utilities, roof is about 6 years old, newer boilers, electric is updated

Expenses $ 23,032.00

Accounting $ 500.00

Lawn and Snow $ 1,000.00

Property Insurance $ 2,200.00

Property Management $ 3,144.00

Property Taxes $ 5,400.00

Repairs, Supplies, Maintenance $ 3,930.00 (10%)

CapEx $ 2,358.00 (6%)

Trash Removal $ 500.00

Utilities: Electric $ 500.00

Utilities: Gas $ 500.00

Utilities Water $ 1,500.00

Utilities Sewer $ 1,500.00 

Started at 34....spent quite a bit of time searching for a reliable, trustworthy property manager. I own another business where I was just stacking profits and figured real estate was a good place to park some of it.

Started last year and now own three 3 fam's and two four fam's hoping to get more into the four-six fam's and away from the 3's for cash flow purposes.

@Michael Noto

 No tenants pay own utilities I just pay the house accounts, common area ones. Gas heating, it's a newer system with 4 heaters that still have warranty left.

@Jeremy Pace10% has been a pretty good barometer on the other properties I own but it's a fair point you make. Yes, 4 separate units

Purchase Price 180, 4 family built in early 1900's

Roof, heating, electric all updated in last 5 years, replacement windows and vinyl siding

Off street parking, dead end street c+ b- area

30/yr mtg 4.65% about 6k in closing costs

Annual income including coin op roughly 39k

Using 10% for repairs/mait, 5% cap ex, 8% gross rents for prop management, taxes, accounting, lawn/snow, trash, utilities etc....noi is about 14k

CFBT is about 6200k

I like to get about 200 per unit per month on a 4 fam which i would be able to if not for prop mgmt fee so I'm thinking this is a decent deal

Thoughts?

Thanks @Ariel O.

I don't think there's a hard and fast rule. I think other things come into play like you're comfort level in buying another one, your ability to manage another, your cash flow situation, your reserves, your other income streams (if you have some) etc.

My personal approach is that I look for the best deals when I'm comfortable buying something. I might have some major repairs/renov going on and I might want to hang tight and let those settle, others might not...I'm mostly solo in terms of financing while others may have a group hence the purchasing power and flow is a bit more robust..that's just one example.

Sometimes saying no can be just as good as saying yes.

The main point of the LLC is to protect your personal assets (and other properties assuming they are in their own LLC's) from liability based on what happens on a given property.

The drawbacks can be admin related and sometimes cost related. For example, in RI they charge 500/yr just to have an LLC so that's a crappy expense to have :(

Also if you have 10 properties in 10 different LLC's that's 10 quickbooks files, 10 bank accounts, etc. You can put them in one file and use "class tracking" to get around the files but the bank accounts are separate anyways.

What I do on 4 fam and under is do residential financing in my name to get excellent residential terms and then quit claim them to the llc after purchase. "technically" a bank can call your loan for that but i've never, ever seen that nor do I think that's even a remote possibility.

If you go LLC from beginning then you'll get commercial financing where the terms may not be as favorable.

If the properties are similar class wise and equity wise you could make an argument for putting them in 1 llc but from a legal standpoint individual ones are generally considered the "safest". 

edit: oops posted at the same time sorry for the dup info