All Forum Posts by: Mike Montana

I have a similar building of 15 units. And would agree that from the outside some quick things to do as you mentioned painting the doors and as shutters a little landscape@Salvadore Lentini mentioned would certainly help. Additionally seal coating and striping the parking lot would make the building pop as well as help prolong the life of the asphalt. We just had to invest $10K to repave one this spring. As for interiors with out seeing them hard to tell, but outside of kitchens and baths (which can be expensive but do have the biggest positive impact on prospective tenants) we have found that fresh paint and new flooring makes a huge difference. We often struggle in the same way over the years however we found as soon as one is vacant our best return on investment has been to spend the money immediately to get it up to par. Hopefully that's helpful.

Thanks @Brian Adams. That is helpful information. Good to know about not building a reputation as one who continually "re-trades".

So I have been analyzing an opportunity to purchase a property with 33 units. After doing the Preliminary evaluation of expenses and revenue we come to the conclusion of what we believe the property is worth on paper. In our calculations, we have good margins for maintenance expenses as well as building reserves for Cap-Ex, which are based on the seller's numbers and our experience with some smaller multi-family properties we currently own.  In looking at the current rent roll it does appear there's opportunity in bringing rents to current market value. We believe we can accomplish that through some upgrades to the property and have been successful in the past through good management of properties.  there also may be some opportunity to reduce utility expenses. 

The owner claims to have done some recent capital expenditures over the past year but with a quick drive-by of the property, not even going into Official due diligence, it is evident that the 5 building property will need some immediate attention to the exterior. Paint, blacktop, roofs, and landscape to name a few. My question would be, if the numbers support a $1M purchase price and there is conservative $100K worth of deferred capital expenditures, do you write your letter of intent for $900K? Thanks in advance for your input.

I would echo most of the comments so far. I personally have only been on the forum for about two months, but so far I have found it to be very much just a place of sharing information and a Community of people who all have a common interest. I'm sure like any place there are folks using it strictly as a lead generating process. But at the end of the day like any Community that you network within it typically lead to opportunities. So if you find a couple good partnerships through the process it wouldn't be the worst thing. Just my 2 cents. And Welcome to BP.

I certainly would agree there is great value in keeping good tenets. Over the years we have almost always taken the "keep good ones" approach and try to incrementally move up the rent $15-25 at a time to get them closer to market. Especially if they have been there a long time. If you consider the fact that most likely after a long term resident leaves you have to invest some money to freshen the place back up and likely have a month or so of vacancy, which very quickly can offset any gains you may experience.

I have a small multifamily property (15 units) and we are considering how to pass on utility cost to the residences.  The building consists of one and two bedroom units along with 1 three bedroom unit.  unfortunately, there is no good way to sub meter.  In fact, several units actually share a single water heater.  One thing that is easy to separate is the sewer.  We have a standard assessment per month and it is actually based on the number of units in the building.  We also have a pretty good idea of the average water bills since we have owned the building for almost 15 years.  The thought was to assess each unit a portion of the sewer and average water bill based on the number of residences.  I realize that we may not be able to cover the entire utility expense, but if the bill averages $600/month and we can recover even 1/2 or 3/4 of that I would be very pleased.  Has anyone ever had any experience with this?  Is there any regulation or laws that would preclude us from doing this?  Any ideas on how to bill this monthly other than adding it to the actual rent?      

Sorry, I am a little late to this party.  I have used E&E Granite and Marble and have a few investor friends who have as well.  Eric Chavez is the owner great guy and they do good work at a fair price.  

I would agree with Stephen and Jim. Over the years I've been in the same situation and number of times where the timing of the issue is not good. Whether that be because I have significant vacancies or like you mentioned another rehab in process. However I agree with Stephen that most of the time those folks end up dragging it on getting worse and worse and finally not paying. Therefore like Jim said if you let them go month-to-month you my Band-Aid it for a month or so until you finish your rehab and then you can take action to give 30 day notice.

Brandon, Well first of all let me say I've made the same mistake more than once, so as long as this is the only time you make this error you'll be ahead of me...:). With that said I am not sure what the tenet laws are in WI or the language of your lease it is hard to say for sure what can be your recourse. Today being 9/2 it may be early to get too worried, however personally if they are not responding by tomorrow, in a situation like that I would place a "notice to quit" on the door requiring that they contact me to avoid eviction. I will also say that in the past with a similar situation I have actually changed the locks to get tenets to call me. The reality is they would have to go through the same process to file a claim against you and in our state Indiana the courts and specifically or county records are pretty favorable to landlords in this kind of situation. Not sure if any of that helps...