All Forum Posts by: Josh Justiniano

By Pro Forma do you mean the numbers provided by seller? The answer is no.

Most of these numbers are the seller's, but I've added some of my own and increased some numbers that seemed too small. (I.e. repairs for the year were stated at 3500, no replacement reserves, or admin expenses or contracting expenses)

After the sub metering I suppose we'd be able to hit a 12% to 15% Cash on Cash with an 5 year IRR of 16% to 17%

Here's a picture instead with revised numbers:

Just put in an offer for around 715k on a building in a lower income area in Chandler AZ, but surrounded by good neighborhoods with great schools, as well as higher income areas This particular neighborhood's median household income is around 30k whereas surrounding neighborhoods are 60k-85k. Good employment and strong economics it looks like.

It's an older building on a master meter. Built 1938 (Yikes!)

Our plan is to sub-meter to save on those utilities. 

First question: Even if all the big ticket items such as roofing, plumbing, electrical, etc... has been kept up, what are your opinions about building older buildings? Please share some experiences.

Second Question: How do these numbers compare to your "average rule of thumb" numbers you might use in an analysis? Are these figures too high? Too low? 

Gross Potential Income	$132,000
- Vacancy	($10,560) 8%
- Concessions, Loss to Lease, Bad Debt	$0
Effective Gross Income	$121,440
Other Income (Laundry)	$2,500
Total Net Income	$123,940
EXPENSES
Real Estate Taxes	$12,500
Insurance	$0
Contract Services	$2,190
Trash Removal	$0
Electric	$0
Gas	$0
Water and Sewer OR All Utilities	$37,500
Legal	$1,000
Management Fee	8.00%	$9,915
Repairs and Maintenance	$7,500
General/Admin	$1,100
Payroll	$0
Other	$500
Deposit to Replacement Reserve	$3,000
Total Expenses	$75,205
Net Operating Income (NOI)	$48,735
Debt Service
Principal	$7,384
Interest	$24,857
Total Debt Service	$32,242
Total Distributions to Members	$16,493
Member Contribution	$234,163
ROE	7.044%
Member Cash on Cash Return	7.04%

Any good recommendations for good PM for small multi-family (9-35 unit) properties in the Phoenix Metro?

Hello and welcome. I do most of my deals in Bakersfield. If you need help, send me a PM. Maybe we can even possibly do some deals down the road. Fyi some of the people I do business with are making sure their margins are fatter in that area because of the recent oil crash. This has caused some layoffs over in Bakersfield recently. Not saying that pricing is going to go down there, but demand for housing might just slightly. Property might sit on the market longer. So just keep that in mind when you're analyzing deals.

@Ali Boone Yeah I.E. is pretty much a no go for cash flow. Fresno might work, Bakersfield is getting really, really tough, esp. for Multifamily. People are buying assets at a 6 cap in Bako. Doesn't seem to pencil out anymore unless you can settle for some pretty boring returns.

Are you wholesaling there?

Count me in. 

When we are buying with a tenant in place what steps do we need to take in order to assume the lease agreement and security deposit?

I'm assuming there is an assignment of lease agreement and security deposit?

Any help would be much appreciated as we are scheduled to close on Monday.