All Forum Posts by: Matt Pulliam

@Jonathan Spaeth the link to the FB group is here: https://www.biggerpockets.com/forums/521/topics/586903-biggerpockets-atlanta-monthly-real-estate-meetup?highlight_post=3531213&page=1#p3531213

@Account Closed man, this thread is amazing and I can't believe the value you have been giving back in here. Thank you so much, first. 

Second, my question is: how does one ARV a multi-unit, like a fourplex? SFH seem pretty easy since you can pretty easily pull comps from recent sales on the zillow, etc., but that's not really an option for multi-unit properties. I have one in mind that I'd like to BRRRR, but I really can't ARV it to run the numbers and make sure my Refinance portion will take, so I can get out of the private money. Any advice/tips? Thanks in advance.

@Andrew Johnson @Kyle R. Right on the submetering. I don't think I would handle it that way. There are several developments here in Atlanta that just evenly (or otherwise) split up the total bill and pass it on to tenants as a water charge (including an admin fee!) in that way. Obviously, not perfect, but takes an expense off of me.

Interesting numbers, Kyle - seems this place is using A LOT of water given the 24 v 80 comparison. Obviously, rates in the city may be higher, but that's a crazy disparity in number of units with a similar water usage charge.

Appreciate both of your input!

@Andrew Johnson my man! - see, this is why BP is so great - you're educating me so much right now! I did put in 8% for repairs/maint when I ran the numbers ($1496/m) and 8% capex ($1496/mo), but didn't get those from the owner and didn't include them up top (error). 

And you're right about landscaping. There's not a ton of greenspace, but someone has to mow it/take care of it, and I didn't factor it in. And the amortization I ran at 8% interest with 3 points, but 30 years, so that changes things. Great info 

But, I think you are right, the rent increase is clearly the biggest factor here, which, if even possible, would lead to massive vacancy for at least some time. This, of course, increases holding costs during that time as well as during the renovations. As well as what the upgrades are going to cost me. I suppose we could stagger the renovations as people's leases run out for several reasons, but that also presents other vacancy problems, I'd guess.

@Andrew Johnson thanks, Andrew -this is EXACTLY the kind of info I need. Like I said, I've never done a deal like this before, so these are the kinds of things of which I need to be reminded. I assumed there would be plenty of turnover on current tenants. I think my major blind spot is that I can't even conceptualize something this size. So I appreciate it. Awesome feedback

I've been presented with an off-market deal for a 24 unit complex, but I'm not sure if the numbers look good or can be better since I've really only done SFH investing prior to this. I've run the numbers through the calculators on BP, but want to know if I'm missing something. Also, I don't really have a concept for how much renovations/upgrades for something this large might look. Here are the numbers I have from the seller:

22 2 BR, 2 1 BR with 2 vacant needing rehab

2 BR are at $495/m and 1 BR at 445/m currently

100% occupancy would be $11,780/m or $141,360/yr

Expenses:

Garbage - $1356.80/m - $16,281.60/yr

Water - $2800/m - $33,600/yr (I would most likely stop paying this and pass to tenants if bought)

Taxes - $10,700/yr

Ins - $8660.64/yr

Vacancy 10% - $14,136/yr

Prop Mgmt 7% - $9895.20/yr

Net Cap is 5% at a higher asking price of about a million; I am told I can get it for closer to $700k prior to listing

After upgrades and increased rents to $850/2br and $650/1br, GMI increases to $20,000/m or $240,000/yr

I've checked the rent comps and they seem accurate, but I also don't know where someone might fudge a little. 

One major number I'm missing is how much it would cost to rehab to get me up to the increased rents, but it wouldn't be a stainless steel, top tier type upgrade. As it sits currently, with only about $20,000 in rehab costs, it would only cash flow about $500 according to BP calcs. After upgrades, with rehab set at $50k, it's a much better cash flow. Also, I have no idea how I'd finance such a deal right now, but it might be about 10% of my own money and finance the rest. Not sure if I can get owner financing as this is very new. 

Any help/advice is appreciated. Thanks in advance!