All Forum Posts by: Mike Dymski

Most people go a lifetime without having that perspective; so, you are way ahead of your 17 years...well done.  Get your degree, keep learning, start a business and become financially free....you are well on your way.

@Karen P. Silly question...did you replace light fixtures and, if so, did you go back with ceiling fans or just flush mount fixtures?

@Tom G. search loopnet and reach out to the brokers who have most of the listings in your area.

Regarding finders fee, there is a broker in my area who charges $5000 to find MF for investors. I did not go that route but it's out there in my market.  IMO, the best way to get on a brokers short list is to close deals (and generally foster a friendship).  Your resume will show them you are serious.

@Cale Ferguson Hey Cale. Check out the most recent BP podcast...NY syndicator buying complexes in Greenville.

 Well done.  Searching for re-positioning and found this post.  I'm going through this and trying to decide which path to take.  Right now, I am just handling vacancies and non-paying tenants.  Next step will likely be to non-renew and give notice to a few month-to-month problem tenants (with maybe the added step of offering good tenants that unit on transition).  Well done on your project and thanks for sharing your experience.

Pics would be great.

How did you handle the rent increases on the in-place tenants who stayed?  I am repositioning two properties...4 units and 25 units and curious on how others are handling that.  On the 4 units, I notified the tenants two months in advance of the increase and agreed to rehab their units if they wanted...2 stayed, 2 left.  On the 25 units, it's still early and I am just dealing with the vacant units and attrition...at some point, I may have to force the others along but can't do them all at once.

Hey Robert, does my math make sense and line up directionally with your thoughts on what equity gets left in the property with a refi now versus later when the rehab is done?  If so, refi now would get you ~75% of your potential lift from the rehab and rent increase ($123k would be left in the equity of the property).

If you don't need or want that equity, you are good-to-go now.  If you are looking for maximum leverage, you can wait unit all units are rehabbed and rents raised but that may be a longer horizon if you have good in-place tenants at the $1200 rate and you don't intend to force another rent increase.

Couple of other considerations (1) outlook on rates now versus later (2) current reinvestment opportunities (3) idle cash if refi and no immediate reinvestment (4) loan prepayment penalties, if applicable and not waived.

I'm curious on what you are going to do.

Very well done.

$6000 x 6 remaining units = $36,000 x 75% LTV = $27,000 equity will stay in the property if you refi now (assuming this work will be done in the future).

$125/unit remaining increase for 6 units = $9,000 additional NOI / 7% cap rate = $130,000 x 75% LTV = $96,000 equity will stay in the property if you refi now. Just used 7% cap and 75% LTV for illustration (and assumed the rents would be increased to $1325 in the future).

Total equity (later) left in property if refi now = $123,000 (using 7% cap).

~$250/unit current increase on all 12 units = $36,000 current additional NOI / 7% cap = $514,000 x 75% LTV = $386,000 current cash out.

Someone check my math...it's happy hour here...

Need to determine if you have any loan prepayment penalties and other refi costs to add to the math above.

"@ Charles Morgan, I could buy one in Aberdeen, WA or one in Lakeland, FL now with cash on hand if I wanted to. I would have enough to buy about 4 properties in cash if I draw 75% of the money out of 3 out of the 4 houses and combined with cash on hand."

If you want to leverage, I'd recommend getting financing on the new property(s) rather than paying cash (and having to refi 3 mortgages).

IMO, at 50 units already, you are good-to-go and should start contacting brokers and lenders and looking at real deals.  In my market, you would have more experience than most of the existing 20-50 unit operators.  Looking at and analyzing a few real deals and getting your potential lenders lined up will help your learning curve and build relationships.  Good luck.