All Forum Posts by: Kevin Anderson

@David Wierzba It's all about networking. I have a lot of close colleagues and friends who are in the business and you never know when someone wants to cash-out to buy other properties or are just getting too old/tired to manage them. I've been told many times there are plenty of opportunities on the MLS (@Bruce Runn will confirm that), but I prefer unlisted opportunities so it's only between me and the seller. Easier said than done, but talk to anyone and everyone! 

@Account Closed I will look into the IRS-6252, I think that's the best bet. The seller only receive the down-payment of the agreement upon the sale at the time of closing, not the lump-sum, correct? 

I just confirmed the actual rents and the gross rents come out the same. With that info and all else equal to my assumptions (including the utilities above paid by owner), what would you value a property like this, Bruce? I know you know Uptown well. 

Thanks all! 

I'm working on my first multi-family investment deal since moving back to Minnesota from Wisconsin in order to start growing a portfolio locally. I found two separate unlisted 4-plexes in Uptown. Ideally, I would house-hack one of the 4-plexes, use the Home Possible Program to put 5% down and potentially purchase the second one conventional if each of the deals worked out (using the backing of a seasoned family-friend investor to assist w/ financing). Both do not have asking prices and both owners want to "cash-out" but are also worried about cap gains tax, more questions on that below. 

Here are some assumed numbers: 

Fourplex #1: 

2BR - $1750

2BR - $1400

Studio - $800

Studio $750

Rental Income = $4,700

Vacancy 5% (assumed)

Net Rent: $4,460

Parking income = $300/mo

Washer/Dryer revenue = $1,000/yr or $84/mo

Utilities: $13k/yr 

Insurance: $2,100/yr 

Taxes: $8,300/yr 

CapEx & Repairs: $250/mo

4 year old roof and boiler 

Financing: Assume 5% down, i = 4.5%, 30yr, closing costs of 2% w/ PMI of 1%

No commissions

Fourplex #2: 

1BR - $800

1BR - $850

1BR - $850 

1BR - $925

Rental Income: $3,425/mo

Vacancy 5% assumed

Net Rent: $3,254

Parking income: $270

Washer/Dryer: $500/yr or $42/mo

Utilities: $7,700/yr

Insurance: $1,500/yr 

Taxes: $6,300/yr

CapEx & Repairs: $250/mo

4-year old roof, windows, siding

Financing: assume 5% down, i = 4.5%, 30yr, 2% closing costs, 1% PMI

No commissions 

My questions are as follows: 

- What should my offer price be on each property and what is the highest price I should be willing to pay for the properties? My threshold is 10% COC and $100/mo/unit cashflow but understand there is more potential home-hacking here and I can't low-ball in this market.

- How do my assumptions look above based on the market? 

- How should I finance the properties if I wanted to buy both? (House-hack one and conventional for the other? Can you bundle your loan in that case?) 

- The sellers want to "cash-out" but are worried about Cap Gains Tax (no 1031 either). Should I ask for seller financing to defer this? Any other creative options? 

Thanks in advance for any help/suggestions. 

Bruce - this is a good looking Duplex, love the potential of the Whittier neighborhood. You seem quite savvy so I'm curious how this would return for an owner-occupant like myself using FHA.

VanquishAP is a good tool for the more tech-minded investors. Local company in downtown Minneapolis as well. 

Thanks everyone! Cool site. 

I work for Cresa, a national company that exclusively represents commercial tenants and buyers. We work with many large Madison companies and national companies alike. 

Is there a good community on this site of investors that do office, retail & industrial investments? 

Thanks again, 

Kevin 

Hello All -

I'm currently a commercial real estate broker in Madison, WI and I specialize in buyer and tenant representation. I have worked with a number of developers / investors / owner-occupiers over the past few years and I'm looking forward to building my network. Since I have insight in the market, I'm able to uncover unlisted opportunities (residential or commercial) and broker the deal on behalf of the buyer. I'm also interested in buying multi-family buildings and any buy-and-hold opportunities in my market and the surrounding areas. 

If anyone is interested in the Madison or Milwaukee markets, feel free to contact me and I'd be happy to share any insight. 

All the best,

Kevin