All Forum Posts by: Justin Woodworth

After making all the rents a standard 650$, even with paying ALL THE UTILLITIES this property then cash flows at 1698.56 a month coming to an 8.98 cash on cash return with a 20% down loan at 4.5%. 

Obviously I haven not walked the apartments, I have no knowledge of how gross many of these apartments are, but this seems like a prime opportunity to scale and make changes. 

Overall I am just trying to learn what other have done and what they think specifically about these small apartment buildings. Thanks

So this is a 14 unit apartment building bundled with a 3 unit house. I am looking at the information from my agent and there seems to be a lot of room for improvement.

Firstly, the owner pays for electric, heat, water and sewer. Why? I have no idea however I imagine those expenses could be put on the tenants and instantly bump up cash flow.

Secondly, 2 out of the 14 rent agreements in the apartment building are at full year leases and the rest are month to month. Along with all of them having different rent prices fron 450-700. I have no idea why there is any variation. However if all the rent was bumped up to 650 this building would become more profitable. 

I am not currently in position to buy this property and I am doing practice at analyzing deals. This complex cash flows at 2% with none of the changes. Awful return. But it seems to have been ran by a mom and pop shop. I have been listening to multiple podcasts that are stating "look for the potential" aka raising rents, lowering expenses. 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hey BP'ers,

So I am currently reading Raising Private Capital by Matt Faircloth. It is a wonderful book and very helpful. I have a question that I have not had answered. 

Lets say I find a deal for a rental property but do not have the capital for the down payment on the house. This private lender is willing to give me the 20% down for the down payment of the home. We agree to split profits 50/50 (equity and cash flow). He finances, I manage. Does this turn the property into a security? SEC rules apply?

I only bring this up because I have been researching multiple avenues of getting deals done and I seem to be knee deep in the weeds. I recognize that definitions are important especially when it comes to legality of certain arrangements. 

Thanks for any input! 

Mauricio is the man. He answered many of my questions. 

Thank you @Amy Beth

I was leaning that way! I appreciate your input

You have all been very helpful and insightful. Thank you guys!

Dear BP'ers

So recently I have been guided by some folks on here into doing BRRRR partnerships in order to create more and be invested in more deals. My question is what are the steps to creating a successful partnership and how are they structured?

I know multiple people who would gladly invest in real estate with me and I want to offer them opportunities to grow their wealth along with creating extra cash flow for myself. Are there any guides out there? Or how do you have your partnerships structured?

Thanks

Justin

@Michael Ealy

Thank you for the response. I will plan on having three months of vacancy budgeted. Do you think kicking the tenant out who has treated the property poorly is the right move? Even though they pay close to market rent? I could always keep them for the year that I have to live in the property (FHA househack) and then when I can effectively leave renovate the other side.

So short and simple, 3 months of vacancy if things go terribly wrong or deal with the tenant's treatment of the home for a year then handle it.

Dear BP'ers 

I recently am closing on a duplex (end of July) and the side that was previously owner occupied is in decent condition. I plan on just adding new hardware to the cabinets and tearing up the carpet to put vinyl flooring down. Other than that it does not require much work.

On the other side however there is a tenant that has managed to find a way to put drywall anchors into every unforgiving place along with destroying the carpet and trim in most of the house. Now I know you may just say "Justin, drywall and carpet are easy" and I would agree with you. But here is my dilemma.

The tenant recently had his rent bumped up from 1325 to 1480 and is on a MTM lease. After using Rentometer and using comps in the area I believe I can rent out the first side for 1550 (4 bed 2 full bath). I had the idea of getting the renovations done on the first side and then renting it out to new tenants who would not treat the house like they were playing "who can hang the heaviest object from the drywall". Then I would not renew the previous tenants lease, get him out of the building and live on that side while I renovate. If all goes to plan I would move out of the duplex in a year and rent out both sides. 

Any suggestions? Tips? My income from my work is more than enough to cover all the expenses if I was to have a month long vacancy period or some other form of issue. 

Thanks!