All Forum Posts by: Mike Dymski

This is nonsense...get them a hotel room. They are the ones who are in the losing situation. Your situation is just a normal cost of REI.

IMO, you are wasting your money giving it to someone who is not interested or does not need to sell her properties.  If she truly wants to sell, she will figure it out a price without needing you to help her.

In my market, refinishing hardwoods in a 1/1 would cost under $1000; so, you may want to shop around.

Hardwoods hands down...look better, rent better, cleaner and hold up better (especially 1951 hardwood) than carpet.

It's customary in my market to provide access prior to making an offer.

Most apartment flippers are savvy enough to sell a property at market value, which may leave a fair return for the buyer, but not amazing.  Amazing typically comes with being able to add value and it sounds as if the seller has already done and realized the value add.

Regarding the financials, they likely will be incorrect, especially if they are not providing a system generated T12. Even then, you have to generate your own figures. Regarding history, they've had the property since November and can provide that history...they likely just don't want to. If they or you are working with a good broker, the broker should be able to help with this.

Rent - Once under contract, you can perform a lease audit to validate the rents and the tenant's credit/background.  The rents will help with your projections and the credit/background files will help ensure they did not just fill up the place with deadbeats.  You can also figure out a way to survey the area to see what market rents are and how that lines up with the seller's information.  Survey the area as well to determine your vacancy factor.

Insurance - have your agent quote it

Taxes - look them up on the county records and make adjustments for the new assessed value with the property trading hands

Management - find out going rates and include them

Trash, pest control, landscaping - same...figure out going rates, if applicable

Utilities - not sure who pays

Maintenance and cap ex - Highly debated topics on BP; so, I'm not going to get granular...have to search the site.  For cap ex, you can create a spreadsheet for all the building components, their cost to replace and divide each by their respective lives to estimate monthly/yearly cap ex.  My guess is that if the overall figures appear amazing, maintenance and cap ex are underestimated.

Maybe trying running your figures through the rental property calculator on BP.  It has some helpful hints.

Hope this helps...good luck.

IMO, the vinyl planks would work great in the living areas for both resale and rental.

At 820, you will receive the best rates available and the financing of closing costs should have no bearing.  I'd recommend asking what changed from one day to the next.

Credit score = 700+

Bankruptcies = none

Foreclosures = none

Net worth > loan

Liquidity = 9-12 months of debt service coverage

Leverage on all real estate < 75%

some REI experience (or you have a great balance sheet or low LTV)

These will vary by lender and loan size.

@David Thompson I had the same thought on MF and had written and deleted it when I wrote my reply above.

Brad, it sounds like you have a nice skill in rehabbing and creating value from it. If you did that on a small apartment complex, it's like flipping or BRRRR on a larger, more efficient scale.

That's great.  Have you decided what you are going to purchase?

This feedback is not related to your OP, but if your rentals can not cash flow as you would like at 80% LTV, you may want to consider selling and reinvesting in properties that meet your return thresholds. This assumes no appreciation potential as you are more interested in immediate cash flow to live on and maximum liquidity to purchase additional units.

Your strategy is working and if you want to accelerate the pace, you may have to continue to value add and flip rather than hold.  Your next flip could be an apartment and that could provide the capital to have enough buy and hold units to live on.

On the refinance scenario, those proceeds will be used to purchase another property; so, you can look at them as debt on the new property rather than the current property having to cover that incremental debt payment.  It's just semantics but if you can find a property that can support that level of debt, with your value add skills, you likely can make it work.  Fast pace sometimes requires taking more chances and leverage and being good.

Congrats on your success...good stuff.