All Forum Posts by: Mark Fedorov

Well a neighborhood that is "safe" and "easily rentable" is possible, add in "rents are high & taxes are reasonable" makes it harder.. all that and "brings positive income".. yikes from day 1?.. that may be hard.

I suggest that you talk to brokers, they would have places that are ready for a new owner to walk into, I would also suggest that you switch from"multi-family" to a condo (or two) that you buy and make positive income by renting them.

Also, I would worry less about the taxes and more about the cash flow, including all the expenses and the existing rent.. if I pay high rent, but I get a lot of cash out of it I am happier then paying low rent and breaking even.

Nope, your Dad is being taken for a ride. You (or him) need to spend 2-3 days there, hire a new management company, a 2 year vacancy is extremely odd, I would think your Dad is very embarrassed about this, try to dissipate that as much as you can... act now, get new management, evict the bad payers, new new tenants, stabilize, and THEN think about selling.

Tough to tell with out details. Are most of the unite 2+Br?... because tenants for 1BR apts usually do not have school age kids. The closed school is actually an opportunity for development, someone may put a charter school there (that would help you),  or make it into apartments (that would be bad).

So I guess the question is you said "The area is B- or C+ now and the deal is good but not stellar." Do you think the area turned to b- with the closing of the school?.. if so I would say it increases the risk, since you don't know what will land there, but it does not automatically make is a worse neighborhood.

When the risk is higher, so are the potential returns.

What is the most important word in that sentence?

Potential.

Only buy what you can manage.

Make sure your plumber is on site when they turn the water on.

So this is bank owned.. wow.. this is going to be uphill for you.

First and foremost, what cash do you need to put into the building to turn back on the utilities and make sure everything is livable again? With the plumbing shut off (and the power off probs) it will be difficult to find out it there are plumbing leaks or other issues.

Without current tenants, you will have a tough time finding market rents, you should also assume a 3 months to fill it up, make sure you have the cash for that. If you have never done this before, you are going to have to buy, repair and rent out the 3 apartments ASAP to get cash out... If I were you, I would get a partner, this is alot of work... and if you note, none of these issues can be solved my your realtor.

You also need heat, and potentially cooling, that would cost. Also, most importantly you need to find out if your house is zoned for 3 units, and what the building inspector will require... a quick trip to city hall would let you know if this is possible or not.

Talk to the local tax collector. There has to be someone in the county that sells the liens, they will know the most, and if you are nice, they will tell you more information than any podcast.

property taxes, utility costs, insurance costs, if you can not tell how much maintenance the places need, you should bring someone who can.

Sounds like you are paying for the land mostly.

That is what I did, Own the property yourself (have an umbrella policy), start an LLC (it only cost $125 in PA) and have the LLC manage the property. (you will need a contract between you and the LLC for them to do that, really, as silly as that is, that keeps the veil intact). Then you can have the profits of the building on your schedule E and then if you want to pay your management company, that shows up on your schedule C, it will also allow you to consult/contract out your work and still flow though your schedule C.