All Forum Posts by: Nik S.

@Karen Higgins The PM company I use uses Appfolio. From an investor standpoint (multifamily), it really creates an awesome experience for me. Cloud based accounting system is huge for me. I can see the PM’s tenant notes, on going payables / receivables, Cash in account, view bills, work orders and the list goes on. Cash flow sheets and balance sheets to my avail at any time (as entries are made it’s instantly available). You can chat within Appfolio to tenants (creates a place of record!) and the tenant database style is awesome. I’m not sure how it works on the land lord / property management side but all I can say is for the investor it’s ideal. I’m nervous when I have to hire an additional property manager that doesn’t use Appfolio.

@Sanjoy V. Underwriting properties in this range are fun but can be very tricky. Look at all the parameters. As far as financing goes, yes the lender will be underwriting you as well as the property. The lender will look at your experience as well as how much equity you and your partners are putting down. They will make sure the debt service ratio is 1.25 minimum. Meaning there is enough cash flow to cover the debt + 25% “left over”. The lender will want to see owners 3 year tax returns. If the property had stable occupancy and stable income, it’s a good sign it will continue on assuming management is doing their job properly. Increasing rents sounds easy but doesn’t seem to be the case all the time. Get an idea on your potential insurance quote. Check for Federal Pacific Stan lok breakers. Nobody wants those and insurance companies give you problems (right fully so). Is there an on site manager / maintenance tech(s)? Is their a leasing office? Do you have a “payroll”? I like larger properties, especially C+/B-. Generally these areas and tenant class remain solid. Look for deferred maintenance, Bc I’m sure there’s plenty. Run the numbers in tHE worst case scenarios. 80% occupancy, can the business pay its bills plus a little? Economy of scale, have (8) 12 plexes spread out or (2) 50 unit buildings next to each other..... . Risk is involved with every investment. Mitigating risk is the kEY. Invest wisely and think long term (unless your doing a value add refi gig etc). Finding a DEAL is pretty tough right now so finding a property that meets your requirements is exciting. Right now, things are getting over valued but it’s the simple fact that people are spending more to make less. Just part of the cycle we are in. You could have paid less 2-3 years ago but those years aren’t coming back. Play your cards wisely and you will survive!

@Jared Cornelison

I think this can be a positive situation, deepening on the sellers point of view. If the numbers made sense at your offer price, then great. If its worth it to come out of pocket a little more cash to secure the deal, go for it. Firstly, I would ask the seller to reduce the purchase price to the appraisal price. IF he doesn't agree then come up with a negotiated amount which satisfies both of you. 

As far as the bank funding is concerned, they will only finance based on the appraisal. The seller might try to appeal the appraisal, it's hard to beat but it happens!

Don't let this deter you (this is part of the industry :-)) unless you reevaluate your numbers and feel otherwise...it could be a good "exit" out of this deal. If the numbers make sense, figure out a solution and get the deal done!

Best of luck! 

@Ben Leybovich What about “Black Friday” specials? Perhaps if there’s a limit on each item, have several people order. I always see good deals then. Just throwing a suggestion!

@Donald Murrill Buying a motel and turning it into apartment units isn’t as easy as it sounds. I strongly advise you to go to the zoning office to see IF it’s possible. If it’s possible within the zoning code then the conversion would be presented at a zoning meeting where adjacent neighbors and officials will give their opinion. People then vote accordingly.

@Jim Piper This happened to me. I made my agent take out that we accepted FHA and only showed it to Conventional buyers essentially. Eventually a conventional buyer came (way prior to the 6 month FHA appraisal expiration). It appraised as it should have. I did end up accepting a lower price than I wanted but not as low as the FHA appraisal. The way it sounds, someone conventional will come sooner than later. I hate FHA financing but have had only 1 bad experience with a low appraisal. It’s the worst feeling but it’s part of the business.

@Ben Leybovich @Sam Grooms Congratulations!! By you being able to have your offer accepted prior to the call for offers is everything!! How were you able to do so? Recently, when I tried to do that the broker suggested I give a non-refundable deposit of $10-20k to get it under contract prior to any other offers. In hindsight, I definitely should have done it but lesson learned.

@Shane Boyd Flipping houses at first to most portrays a high risk high reward. Most people and agents are afraid to take the risk. Of course, funding flips can be the main challenge as well. Given the overall RE market, we are all seeing more and more flippers. There’s money to be made, just have to fight over deals now!

@Jason Spicer

I had an apt unit where a guy lived and smoked in for 20 years. The cigarettes permanently stained / penetrated literally everything. Never seen anything like it before. We tried kilz on the walls/ceiligns however the nicotine/tar bled right through. Assuming this is bad, removal of the drywall is the only way to go. You'll spend more time and money trying to mask it. 

I haven't bought any homes on Auction.com but am pretty confident in the over all elements within the site. The property is occupied however I am versed on the situations that will exist. Considering I win this auction, all liens will be satisfied out of the proceeds of the auction correct? Here is the title report provided. If any one can see if I missed anything.  Really do appreciate it! Thanks

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