All Forum Posts by: Seth Murphy

Thank you for the good comments and discussion. It's going to be an interesting month as we try to get a few things solved. We start work on the building next week and my first goal is to try to retain tenants who are upset by the current situation. We've just hired an attorney specializing in evictions and will start down that path on Monday. Meanwhile I'm interested in video cameras in the laundry room as we've had some users from the neighborhood sneaking in to smoke.

I signed this morning on a multi-family property and later found that a tenant eviction was not as represented. The tenant is back from a mental health stay, threatening neighbors at 4 AM, etc. The tenant supposedly threatened to kill the current owner and burn the building down. I do not want to close until this is dealt with, as we went by to get a bid on a broken window today and ended up having several tenants stop us to let us know how concerned they were and that they were thinking about moving out. These were good people that I'd like to keep. My solution is to delay releasing 5% of funds for these 20 units until we have an agreed upon plan for resolution. Any ideas would be very, very welcome. Based on the sensitivity of this, I need to be a little bit careful with the details, but I'll attempt to answer any questions. Thank you in advance for any ideas.

James is right about the range. It will depend on area of the country and level of expertise. All I can add is that it can really be worth it. In 2005 one hour with the right real estate attorney saved us 40,000. This past year one hour with an attorney specializing in 1031 exchanges helped all parties find common ground and see a way through on two deals worth over 12 million. There are other places to cut costs--even when you're someone like me that actively reads legal documents and is willing to spend days on research. Best wishes for whatever matter you need help with.

I've got several all cash deals I need to make happen on a timeline and I'm having trouble pulling the trigger even though I'm under a strict timeline for an exchange. I'm purchasing 40+ units and have found properties that fit within the 200% rule for exchanges that have cap rates from 6.21 to 8% which is good in my area. The rents are low and we can see the work that could be done to improve units. My research shows an opportunity for a very good return on the money invested in low cost improvements. The sellers pricing is pretty sane, but I refuse to pay full price, as the 50% rule for expenses doesn't cover my paranoia regarding future issues. I have a bad year model where I take things out to 67%. Based on this, I want to come in about 10% below asking. I've got friends that would hit at 25% below, even with good numbers at list price, but I don't want to frustrate the sellers to the point that we don't end up doing business and I'm known for being too nice for my own good. There are not a lot of deals in my area that fit the profile I need and proximity to home, office, tool storage, and vendors is a big deal to me. I'd love to talk with other owners in multi-family and compare notes. Bottom line, I think I've found the right properties. Finding the motivation to spend money I have to spend is the hard part. Thanks in advance for any good ideas or conversation.