All Forum Posts by: Emily S.

Well done,@Brandon Purdeu. You're saying you weren't terribly familiar with drywall costs from experience? You just looked it up and said, "No, it's more like this..." and the guy said "Uh yeah, you're right. Good catch"?

I'll be there! Looking forward to applying this to more than just real estate. 

I did it myself with just a few words of wisdom from a friend and a couple youtube videos. Landlord was thrilled with the results! However, the smoke detector was coupled directly to the fire company because the apartment used to be the landlord's place of business. The machine was so loud that I never heard the smoke alarm go off from all the dust, and was rudely interrupted by the police and fire trucks lights outside my window. 

Really though, if I can do it, you can do it.  

Nice numbers there, @Joe Bertolino, congrats on getting those. Do you use a wholesaler, auctions, or what to find those? 

@Hector Sapinoso, how do you plan to manage that money until it's used (hopefully a good, long time)? Are you keeping repairs and capex cash in a separate account to be used only for maintenace or replacing items? 

The recent podcast with Natalie Morris mentioned separate accounts for what seemed like just about everything. Just curious how you plan to manage that money that you set aside. 

As a long term student that lived in many rental units, the most important thing to me was light. That meant walls had to be neutral and light colored. There also had to be a real window in both the kitchen and the bathroom. I couldn't stand the concept of having to use fluorescent lighting even in the middle of the day just to see what I was doing in the bathroom. Might not be something you can address at this point, but definitely important to this renter! And @Julie Macd, too apparently!

Like everyone else said as well, laundry (at least in the building, if not the unit) is a deal breaker. 

Hi @Rich O'Neill, thank you! There's definitely room to raise rents for the market, but given that they've been good long term tenants, and I plan on separating the water meters eventually, I'd like to add value like a laundry unit in the basement before getting those rents right up to market value. 

I was just in town at Limoncello a couple weeks ago. I miss that town and Chester County a lot! Thanks for the offer, I'll PM you. 

@Gino Barbaro - The other three units are occupied with long term tenants. Those units could definitely use updating but I'm unlikely to kick (good) long term tenants out just to renovate. Hopefully the work needed on the vacant unit is what's keeping people away. Thanks for your feedback!

@Jeremy Paschedag - I did enter taxes ($3580 per year) and a wild guess at insurance ($900) on the BP calculator! The ~$150/door did take taxes and insurance into consideration. And you're right, I'll have to confirm that ARV is $300,000 with just making the fourth unit livable, as opposed to renovating all four units. The refi is exactly what I would shoot for, if the numbers still work.

@Brad Saari - Totally get that the 200k offer may not get accepted. I'd likely have to walk away from it though, as I'd like to be more conservative with my costs (using closer to 50% as opposed to 40%). And heck yes the lack of funds is a big missing detail! I'm going to explore partnerships in this area and Philadelphia area and try to secure that, or at least an interested party. Then run it all again with different numbers without the unicorn no-interest loan ;)

Thanks guys, this is so helpful! Looks like if there are no major surprises on inspection and I can secure funding and a refinance option, it's at least worth pursuing. 

Emily

Hi all, as usual, the greater brain power is so much appreciated from this group. 

Found a multiplex in Southeast PA that would start me off on my goal of owning 10 4plexes with a cash flow of $150-200/door and looking for your opinions. Namely, wondering what I may be missing because it's been on the market for about 9 months as a short sale. Nice, quiet area. May potentially need new roof in the next 5-10 years, per contractor friend. 

4 unit - Three are 2/1 and the fourth is a 1/1

Asking price: $250,000

ARV: $300,000 per RE agent, but comps are impossible in this small town

Current Rent: $2280 ($760 for each of three occupied units. Fourth unit is vacant and stripped, awaiting remodeling that current owner never got around to doing.)

Estimated repairs on vacant unit, per contractor friend that saw it: $15,000

Estimated rent for updated fourth 1BR/1Ba unit: $700

Utilities (water, trash; electric is metered separately and tenants pay): ~$200

Ran it through the BP calculators a couple times and found that at asking price, 20% down, and only the three units rented, it about breaks even (including 10% vacancy, 6% repairs, 8% capex, and 10% PM). 

If I got it for $200,000 (which is about 70% of ARV minus repairs), repaired the vacant unit and rented it, the place cash flows ~$150/door. I know that's not huge, but it's a big deal for this area. I haven't been able to find anything that cash flows at all. Here's the link with all the details. 

So, if $200k works for my numbers and that's what it's worth to me, that's a reasonable offer?

Do you guys see any loopholes that I'm missing that is scaring away other investors?

Of course, I don't have the cash to put down on this myself, and that's my biggest hesitation. If I were the only one that would get burned from trying this, I'd be in it already. Just want to make sure it's at least a "good" deal before I drag someone else's money into it.

You all rock, 

Emily