All Forum Posts by: John L.

@Michael Kay A few notes: 

1. Expenses are very low at $12,600 per year (~$1000/unit). 

2. Average rents are low at about $400/mo.  That said, maybe they could be raised? 

3. Who pays utilities? 

4. Take into account a tax increase on sale or at least a few years when reassessed. 

5. Look at crime at a site like https://communitycrimemap.com or https://www.spotcrime.info

@Timmy Fritz I think the main issue is identifying what your mother is interested in gaining from the sale. If she wants a lump sum you’ll need to find a way to gain possession by either traditional financing, or possibly a land contract or master lease option and then (assuming you can) refinance after a renovation with a quick turnaround. If she isn’t looking for a lump sum right now you could ask that she seller finance at whatever terms work for you both.

I’d aim for the latter if possible since you could always refinance and there is less risk assuming the refi will meet your assumptions in the short term. You could possibly do it without partners with this option as well.

@Ray Dryjanski "your underwriting" is your analysis of income, expenses, etc on the property that support your offer price. 

@George Frye I would look to a local community bank first.

I would classify them as "apartments", especially if all the units are the same, like a typical 4-plex 2 units up and 2 units down. 

In any case, I would take these estimates with a grain of salt. You could assume that a "house" doesn't include any utilities which might justify a difference, but I'd be concerned if prices are that different for similarly sized units.  Look at other sites (craigslist, apartments.com, zillow) for comps to get another data point. 

It sounds like both need to be stabilized so they will need unconventional financing.

Putting the loans together would probably complicate the deals rather than help.

What's the vacancy and NOI of both properties?

@John Stoeber unfortunately not, but I have been very positively referred to them from multiple people.

I don't know if they require commitment/contract or not, but the one I've heard most is Guardian Water & Power, https://www.guardianwp.com.  

I woud expect a duplex to be priced to the market and comps, not based on cash flow or income. Is this an outlier or does it match comparable properties? 

Does anyone have experience with entity transfers vs actual sales of multifamily properties in Ohio?   I'm aware of the pros and cons of both, but have heard that entity transfers are common in Ohio.  What I haven't heard are specific outcomes as it affected property tax in the end.  I'm curious if anyone has seen a significant increase in property taxes either way, how their lender evaluated the potential increase, and if their lender was on board with an entity transfer.