All Forum Posts by: Mario Brown

I don't do many flips anymore but this one inked pretty easy on paper and I had a partner who wanted to put in the leg work to learn the business. Gross profit is $33,750, close next week.

I broker new residential construction. (real estate agent to the builders) 

Hey @Jason Burr it was listed on the MLS for a while. Text book small MF property "mis-marketed" by a residential agent. ( Bought it back in February )

Double Major ( English & Political Science ) 

Jason Yarusi super cool man, definitely would have been worth it on that many units.

Jason Yarusi On this particular project, most the replaced fixtures were at the end of their lives (10-12 years) I took a couple passes at initiatives and rebates and honestly didn't do enough work on it during my due diligence ( all initiatives need pre-approval) and for the minimal gains $1500-$2000 total I just dropped the ball.

Hey Tamar, here is the list we use. Take a closer look through BP, definitely some very sharp examples out there.  Our list  changes a little from property to property but overall......

Requested Due Diligence Documents

Exhibit B

Inventory of property tools, supplies and personal property

Exhibit C

Service contracts including trash, laundry, extermination, lawn service, etc.

HVAC and/or boiler reports

Exhibit D

Property management license (if applicable)

Certificate of occupancy

Exhibit E

Certificate of insurance

Insurance claims history for the past 2 years

Exhibit F

Commission agreements with the leasing staff

Current property management contract

Any other vendor contracts

Other Requested Due Diligence Documents

Last 2 years of financial operating statements

A year-to-date operating statement

Last 6 months of bank statements

Utility deposit register

Utility bills for the last 2 years.

Property tax bills for the last 2 years

IRS Tax returns and addendums for the last 2 years (as related

to the property only)

Articles of Incorporation

Good Standing Letter from the Department of Revenue

Any licenses in the name of Sathyam Enterprises

Rent roll for the property for the last 2 years

Security deposit register

Payroll records

Each different lease type

Written property policies such as pets and parking

Information on all rent concessions

List of any uncompleted maintenance requests

Maintenance and capital improvement history for past 3 years

Litigation history on the property for the past 5 years

Any operation manuals for the property

Title policy

Site plan

Architectural plans

Environmental Reports

Any mold inspection reports

Any lead-based paint inspection reports

Any fire system reports or citations

I have purchased several properties with 80% LTC from local credit unions w/ a commercial note and the seller holds a 10% subordinating second mortgage OR another 20% LTC from a private lender. These are all value add plays, I'm getting a loan for the property and the submitted rehab budget.

Greenville- Spartanburg- Anderson here.

I am repositioning an 8- Unit Apartment  (Photos Here )  In my analysis i knew that the property was being under rented & with capital & aesthetic improvements i could drastically raise the rents.  Rents are now up 60% on two of the units. 

What i did not think of was the extremely high power bills that these tenants & most low-income individuals live with and accept. $150 dollars a month for a 2 bedroom 900 sq. ft apartment is what my tenants in this building are averaging. 

My thought process is two fold...

The Altruistic Side Of Me

Lower Income Tenants without the education or awareness of the major changes in building codes and green product technology over the last 15 years, coupled with investors that are not financially motived to make improvements that don't have hard objective returns have left a large portion of our population paying more than 15% of their income toward utility bills. Not cool. 

The Business Side Of Me

Selfishly, a more energy efficient unit, allows me to charge more in rent...Wouldn't a tenant paying $600 a month in rent & $150 dollars for power, also pay $665 a month & $65 a month in power?  Unfortunately, most low-income renters think a $150/month power bill is "normal,"  so communicating the value is sometimes tough. However, there is definitely perceived value in a property with new appliances & new windows.  

There also has to be moderate, I am not deploying some of the awesome products that would make my home or your home a more efficient place. (e.g. nest thermostats, spray foam insulation, or one of Tesla's solar roof systems )  but adding some very basic products that this property was lacking. ( I think a lot of mom & pop C & D properties are in the same

• There was zero insulation in the attic ( Added R-38)
• Old Single Strength Wood Windows ( Replaced with low-e replacement windows)
• HVAC 12 Year Old 10 SEER ( Replaced w/ new 14 SEER HVAC)
• 12- 14 year old appliances ( Adding Energy Efficient Appliances )

Definitely the basics, but just making those improvements has definitely directly or indirectly (depends on how you look at it) impacted the NOI and the overall tenant experience. One tenant has gotten back to us, her $150.00 average power bill is now $65.00.  If i only raised rents by that amount, (85.00) over 8 units, i would be increasing value more than 125K

Maybe we classify it as a  "Reverse Utility Recapture" haha. Just my general thoughts, would love to hear some other feedback.