All Forum Posts by: Karolina Powell

In talks on four different properties.  Based on the below information, what would you be offering for these?

Deal #1 - SFH, 3BD/1BA

Ask: 250K

Will rent for: 1750/month

To immediately rent it just needs some paint and some floors to the tune of ~5K.  Will rent for 1750/month.

Capex items needed soon: roof, water heater, furnace

Area: A area, appreciation is at about 5% a year but average home price is ~$500K so this home will appreciate faster, this will have multiple offers on it

Deal #2 - mixed use, small office with a 3 bedroom and a 1 bedroom over it.

Ask: 325K

Currently fully rented on one year leases, bringing in 4775/month but only one tenant pays their own utilities plus owner is responsible for snow removal and landscaping. 

If fully updated, market rents could be 5K a month plus utilities etc.

The office space is currently being used as a medical office and it's a block from the hospital so there is always a good pool of rental candidates.  B class area.  Appreciation ~4% annually.

Capex items needed: new roof, parking lot needs concrete fixed and asphalt resealed - ~30K in work

Deal #3 - SFH, 2BD/1BA

Ask: 65K

Cat smell everywhere, needs new paint and flooring, needs new gutters.  Would split the one large bedroom into two smaller bedrooms. Will need a roof in the next five years.  Estimating about 30K in work.

2% annual appreciation, C class neighborhood.  I own the property next to this and it appraised at 105K most recently.  Rents for 1200/month plus utilities which is what I could get here.  

Deal #4 - SFH, 3BD/1BA

Ask: 80K

Needs new paint, flooring, new kitchen, and bathroom, and roof will need to be repaired.  About 40K in work.

Class C neighborhood.  I own the two homes next door and rent them for 1425 and 1350/month plus utilities.  3% annual appreciation.

I would be putting 20-25% down on these and would be cash out refi-ing from some other properties for the down payment or possibly paying cash for deal #3+4.  I currently have $2MM in 14 properties, 21 doors, and am 64% leveraged.

Looking forward to hearing some ideas on what to offer!  

@Richard Volkov, the oil and gas industry has something like this.  You can own the mineral rights underneath a property and you can sell the royalty or production from the minerals.  Two different ownership rights.  Often folks don't sell all of the royalty or production but a fractional amount of it.  The mineral rights are still real property rights while the royalty and production counts as personal property.  The big difference here is that mineral rights don't need much upkeep outside of some property taxes in some places, whereas the home would be different.

Congratulations this is amazing!

If you have the data easily available, can you give us cash flow figures throughout the 13 years?  I would find some motivation seeing how long it takes to stabilize a portfolio and start to see the profit.

 I live south of the city and only like to go about 30 minutes away from home.  Out of the ones you mentioned I would invest in Bridgeville if the right deal presented.  I'm mostly in the south hills and in washington county.  I think you can find the right deals throughout the area.  I have several single "hip (do they say that nowadays?)" friends who moved into Dormont so that seems to be an area on the rise.  

Also, how old are your capex items?  Roof? HVAC? etc.  And who is taking care of the landscaping/snow removal?  Might be an additional cost there.

If units are updated, capex items look good, leases and tenants look solid, and there are no other regular expenses besides the 5200 in insurance/property taxes then I like this deal.  

Just a tip - make sure you don't just look at the current property taxes.  Figure out what your property taxes will be at the new sales price.

Hi there!

I don't invest right in the city but I do invest south of there so if you end up looking at places there feel free to reach out if I can offer any insight.

Jeremy is very correct - zip codes won't give you a good idea of price.  I just looked at a place that would be worth double if it was a street over even though it's in the same zip code for example.

Welcome!

I appreciate you posting this, gives the rest of us a chance to analyze a deal

I'm on year two, own 21 doors, on paper I should cashflow but I am in the negatives month after month right now.  I'm still spending money on capex items and remodels plus getting rents to market so I'm in the "stabilizing" phase.  I hope next year I can start relying on some cash flow.

 I agree.  And with the amount of scams out there regarding rental property, I would be super weary of anything requiring payment before I see it (and that includes an application fee)