All Forum Posts by: Michael Seeker

What do you mean by "downtown"?  There are lots of neighborhoods in and around the downtown core, each of which has different price points and demand profiles.  Our portfolio is 100% in Old Louisville (though we've owned in other downtown adjacent neighborhoods in the past) and it is common to see extended vacancies in 3 bedroom units in winter months in this neighborhood.

Out of curiosity, what PM company are you using?

@Wes Singleton - that is a good point, however on the development side of things you're looking at highly fluctuating (increasing) material costs as well as challenges on timing due to labor shortages.  A 6-month delay on a 8-12 unit new build could cost you $60K+ in missed revenue.

I'm not suggesting it doesn't make sense or trying to discourage the idea.  Just throwing out some reasons why there aren't a lot of small multifamily new builds going in.

@Wes Singleton - I looked into this years ago.  What are you considering "small" to be?  What areas would you be interested in developing in?

My limited research was on urban infill of around 3-6 units.  The code requirements are the same for anything from 3 or 4 units and up, so it is very cost prohibitive to build a 4-plex when you factor in things like sprinkler systems, exit signage, parking requirements, etc.  It would also be difficult to find infill lots in the city where this is already allowed by zoning.  Things would get easier to do if you go down to a duplex in terms of viable lots and code, but that's a lot of effort to end up with two units at the end of it when the current market would likely support better returns on a spec single family home.

@George Adkins, most students who live off campus stay just to north in Old Louisville or just to the south/west around Churchill Downs area.

@Victoria Radcliff - I generally suggest setting up an LLC if your activity is the beginning of what you expect will be a larger business down the road. This sounds like a one-off situation that probably does not warrant an LLC. If you took out a typical 30-year homeowners mortgage on the property, you can also run into issues trying to transfer the property into an LLC. So it sounds like that is not the best way to go here.

As for a property manager.  That's a personal choice that is a tough one to make.  Do you want to leave your newly renovated property to somebody else's care and pay them for doing so?  I've found that most things you pay a PM for can be done remotely, if you want to do them yourself.  The biggest challenge I ran into was handling turnovers (i.e. showing, make-ready, etc.).  If the house is in great shape and you expect to find a long-term tenant then it's probably not worth the cost to pay a PM company.  If you plan to buy more rental properties in the area, then it might be a good idea to establish that PM relationship now.

@Emma Whear - a couple things to consider with a 1031 exchange (not KY specific):
1. Are/were you guys residing in the ID duplex or was it strictly an investment?  If it is a residence then 1031 exchange is probably not an option or may be more complex/costly.
2. For a clean 1031 exchange, your replacement property(ies) need to exceed the sale price of the disposed property, otherwise you can get into some complex tax situations.  For example, you can not "exchange" your ID duplex for a $40K KY duplex free-and-clear without a lot of added complexity and probably some immediate tax liability.
3. 1031 Exchanges cost money, increase the complexity and urgency of an acquisition and can easily make you stretch investment criteria to make a deal work.  All this can quickly outweigh any potential tax deferral benefits.
4. 1031 Exchange is a tax deferral, so it's not as simple as saying you don't have to pay $X in taxes.  The tax liability will eventually come due, potentially in a higher tax environment.
5. You might need a more specialized/qualified accountant to prepare your taxes after an exchange than if just selling and taking the gain.

Our growing multifamily investment firm has an opportunity available for somebody ready to roll up their sleeves and learn the RE business from the inside with some paid, hands-on experience.

Primary Contributions
-Leasing
-Turnovers/Make-Ready
-Building/Contractor Inspections
-Maintenance (contractor scheduling and/or direct resolution)

Once a proven track record is established, you will be brought into deal reviews, financing, acquisitions and all other aspects of the business.

This is a paid opportunity and working hours are very flexible.  This can be a side gig for somebody with a full time job with as little as 5-10 hours per week or up to full time depending on abilities and level of interest.

Please message or email me with why this opportunity excites you and we'll go from there.

We're looking to divest of a great investment property in the heart of the Highlands on Bardstown Road in Louisville, KY. We've held this property in our portfolio for ~5 years and are considering a sale due to it being logistically separated from the rest of our operations. This is a turnkey property. No deferred maintenance, no tenant or rent collection issues, easy to manage and maintain with clean financials. There is possible upside with a conversion of some or all units to AirBnB and/or first floor to commercial space. Trailing twelve month NOI is just shy of $35K. Let me know if anybody in BP nation is interested before we list with a broker, I'm happy to provide financials photos and anything else needed to review.

@Laura Schumacher - Louisville Water will reimburse you up to 50% for abnormally high bills if you give them a receipt/invoice showing that you fixed the problem.  We've used this a couple times and in one instance only provided them with a Lowe's receipt for a new toilet.

If I were in your shoes, I would offer to reimburse the tenant for half of the overage and give them the info needed to get the other half back from Louisville Water.

You should be careful about insurance options.  We regularly receive letters that look like they're on Louisville Water letterhead.  They are very deceptive about who they are and what they're offering to make it seem like you'd be buying a product from Lou Water when really it's a 3rd party company.

@Courtney Travis - I was in a similar situation in college.  I wanted to buy a house and have some friends move into it for cheap and help pay the mortgage, but wasn't able to financially make it happen at the time.  When I graduated, I ended up moving out of the area and would have had to either manage a college rental from a distance or sell it for a loss.  There's no telling which of those would have been more painful!

It will be a lot easier to buy something after graduating and getting a full-time job and if you don't end up in the same area, you can focus your efforts on a city that you plan to stay in longer term.  While it's exciting to get started, it would probably be a prudent move to keep saving up money and wait a while longer.