All Forum Posts by: Micheal Rieves

I know a few Realtors in town that have been in the business a long time as well that may be of some help.

@Anthony Cliffords 

Welcome to BP! There is a lot of great i formation available on the website. Best of luck as you get started!

Micheal

@Andrea Johnson

Welcome to BP! There is a lot of great information available on the website. The forums answer about every question imaginable. The webinars have been helpful for me as well. 

Micheal

@Johnathan Silva

Welcome to BP!! There is a lot of great information available in the forums. The webinars have been useful as well. They are usually on Thursday evenings. Best of luck as you purchase your first property.

@Angel Vazquez Welcome to BP!!!! There is a ton of information available. Anything you can think of that has to do with real estate is on this website. I have yet to find a topic that does have a blog or a forum post somewhere. The webinars are pretty informative as well. Best of luck!

Micheal 

@Marcus Moore

Welcome to BP!!!! You will find a lot of useful information on the website. Everyone is very helpful. Look through the forums. There is nothing that yo can come across that someone else hasn't experienced in one way, shape, or form. 

Best of luck to as you build your business. 

Regards, 

Micheal

@Joel Owens

Thank you for the input Joel. The tenants pay their own utilities. He pays for the main areas of the building. He has long standing renters in several of the units. Some of them have been there 20 years or more so he inherited them and they are still there. He says he does not want to raise the rents because he wants to keep the long term tenants in place. Once a tenant leaves, they remodel and increase the price. the newly remodeled units are going for closer to $600. Would the units that need to be remodeled count as deferred maintenance (causing a reduction in price discussion)? Secondly, do you always use a 10 cap as your point of reference when evaluating small multi's?

@Joshua Nudell

 Thank you for the figure on maintenance. I was not sure what a good range was. The current owner does most of the maintenance on their own. I remembered the property management initially but forgot to add it when I was adding the numbers to this post. It sounds like you are saying normally maintenance would fall under the 10% capex normally? 

@Michael Worley

I appreciate your input. I also thought high $30k to low $40k per door was reasonable for a small apartment building. I thought the value of a commercial property was based strictly on the numbers but then I heard that what other properties in the area are selling for can also effect the value. Have you heard this before?

@Oren K.

I appreciate the response Anthony! I planned on getting more verification to the accuracy of the numbers. 

@ chris s. 

Thanks!

I appreciate everyone's input as it has been an informative discussion. What am I missing here: 10% vacancy, 10% property management, 10% cap ex. NOI should be 70% of gross rents right? If rents could be increased into the $600 range does any of this make more sense?

Micheal 

I am working with a seller on three 5 plexes that he wants to sell as a package deal. He is not willing to separate them at least not at this time. All units are currently occupied. Here are the numbers: 

Asking price - $630,000 

Down payment $126,000 

Monthly Rent - $7,585 ($91,020 annualized)

Expenses - $1,825 monthly ($21,891 annualized)

NOI - $69,130 Annually

10% Vacancy - $9,102

Debt Service $3,000 monthly ($36,000 annualized)

Cash Flow - $2,002 monthly ($24,027 annualized)

Cash on Cash return - %19

Cap Rate - 9.5% after vacancy deducted from NOI

Average rent $506 over all units

The property has new vinyl siding, new windows, and new roofs in the last 5 years. Five of the 15 units have been renovated. Several units appear to be under rented and they should be able to be increased over time. They also bought out the laundry so they are not splitting the profits for that. It also has land included that may be used for future expansion (i.e. garages). I am not sure how much to account for in maintenance on the property. I feel like I am not accounting for something else that may be very important. Any insight would be greatly appreciated. Thanks in advance for taking the time to provide input. 

@Casanova Brooks

Yes!

@Casanova brooks

Welcome to BP!