All Forum Posts by: Filip M.

@Kaylee Walterbach, I wish I knew how difficult the eviction process is in certain states. My first property is a four-plex and one unit is under eviction process since June 2019 (not a typo). The deal now hinges on the people actually moving out finally...

Yeah, I agree with @Steve Morris, liquor stores are killing it right now. Make sure it is in a decently populated location, though. Quick peak on google maps can give you a general idea, then looking beyond that on demographics of the zip code - I can help with that if you are thinking numbers game like me. I would say larger concentration of younger people in the zip code would be a decent positive indicator for success...

Data Scientist here, connect with me on ideas for large-scale deal potential analysis :) 

Looks like a great deal, even the interest rate is modeled conservatively, given where rates are now.

Hi Jason! I am new to the community here as well :)

Hi Steve,

Thanks a lot for your reply! Wow, that large of rollback on annual median income fair market rent? That is quite shocking. I cannot imagine that happening in Boston, where rent has been rising consistently. It is possible I might not be able to raise as much in the next few years.

I would be putting $35K down & $15K roughy in closing costs, since I am doing an FHA with 3.5% down. so I believe that would be 40%+ cash-on-cash. As I will need to live in one of the units, it would be -8% cash-on-cash, but my living expenses would be reduced significantly. Then pick up Year 2 on.

The owner did offer to put 3 months of rent for that tenant into escrow, but as my first deal, I am not comfortable with taking on the eviction process right on... The risk of second wave and extended moratorium is too big for me.

Hi all,

I am looking on my first deal -- in Quincy, MA. It is a four-plex, 1x 4bd/1ba, 1x 2bd/1ba, 2x 1bd/1ba. It is with section 8 tenants, and I have already walked through the property. It seems to be in a good condition, just the roofs need repairs. Owner has to pay all utilities since it is not separately metered, though. One tenant will stay there whom I met, two units need to be rented to new section 8 tenants who were already screened by the old owner, and one unit i will need to live in for a year since I am doing FHA. Given the area, the housing departments supports very good above-market rents. The owner is about to retire so probably willing to negotiate.

He is having trouble getting rid of the property since he did a favor to a friend of his more than a year ago, and he moved in market rate tenants (friends of his friend, which he now really regrets) who stopped paying last year -- it is the 4bd apartment and it has been in eviction process since last June (2019). Given Covid and MA renters protection (e.g., not evicting in winter, now the moratorium), the non-paying tenants are still in the unit 14 months later. The owner says he had secured a judgment for eviction before Covid, which is now set for October 17.

I am thinking of putting an offer below asking contingent on the tenant eviction process completion.

Here are the property financials:

Rents: 

• 1bd/1ba $1,743/mo 
• 1bd/1ba $1,460/mo
• 4bd/1ba $3,400/mo
• 2bd/1ba $2,386/mo
• Total: $8,989/mo or $107,868/yr

Laundry: $2k/ year

2 story-garage on property, est. rent to a contractor $300/mo or $3,600/yr

Sum Total less 5%vacancy: $108,154/yr

Expenses:

Assume $5k/yr in repairs

Taxes, Insurance, Electrical, Heat Oil, Snow Removal, Water & Sewer

Total $37,726/yr

NOI: $70,428/yr

Debt service: $55k (FHA 3.5% down @ 3% interest rate + PMI)

Est. Cash Flow: $12-14K. If I live in one unit, my cost of living will be about $200/mo vs current $1,300)

Asking: $1M (I am going to offer, say, $940K)

There is a lot of love & hate for Section 8 from what I have seen here, but I think a high-price market like Boston (with section 8 wait list and suspended new applications given the size of current wait list) supports it well.

Would love to hear your feedback!