All Forum Posts by: Nicholas B.

@Lane Kawaoka Yes I was amazed over and over again when I used to refinance my MFH in the 90s and early 2000s in NYC how the appraisals always came in just where needed for the bank to finance what they initially offered to lend. I just assumed that the lending market had changed since then. 

Hi @William Hochstedler I was mostly curious as to how a property like this would get appraised based on current income stream as it seems fairly unique. Appraisal for development seems more straightforward as once entitlements are in place, there is something concrete to base it off of. 

@Brian Burke, thank you so much for that incredibly informative answer. I am getting ready to obtain entitlements for the land and had been considering a few options in terms of financing now based on current income and waiting to develop vs beginning the process of putting everything together for development now.

Yes very much a covered land play, and after having bought and renovated a few smaller apartment buildings in NYC and done similar with SFR in Vegas over the past five years (60 units in total), this would be my first ground up development. Zoning with a senior bonus will most likely end up at roughly 75 units and a retail component of around 3500 square feet.

I see your company aligns very closely with what I've done though you're on a larger scale. I've always only bought value-add properties thought I've never flipped. Hope you keep an eye on my posts as I have several development related questions coming up :) 

I have an 18 unit multi-family property that has rents that are roughly two to three times higher than the neighborhood comps. My 300 sq ft studios rent for $600 and the property across the street gets $700 for 1000 sq ft 2 bedrooms. I can show a rental history on my property going back two years with those rents.

How does an appraiser view my rental prices for the purposes of a loan? 

Lets say I build 75 units on this site that get those rent amounts, does that change anything? 

And here's another more interesting question. This multi-family is on two acres of land zoned for 75 units. The land currently is worth roughly 1 million. The rental income currently is 150k gross and 120k after expenses. 

Highest and best use I'm assuming is the current use. at a 6% cap rate it's worth 2 million. However that doesn't give any value to the land value. 

If you appraise it purely for the value of the current income you're completely discounting the land that's included in the sale. If you appraise it for the land you're ignoring the value of the rental income. 

I also can't think of a way to combine both of these. As an investor I'd pay 2 million plus an additional amount for the potential of development. Does an appraiser look at it this way too? Or simply value it at 2 million?

What's the address? I can probably find it online. Tried sending this privately but I can't seem to find anywhere to send private messages here.

WIll F. (can someone show me how to link usernames properly here?), I strongly advise for the Fujitsa Scansnap, I have their latest wireless version, and had their wired version for many years before. Devonthink Pro is a fantastic software package, and a few days ago released what finally appears to be a stable sync package that allows me to have all my documents on my iphone and ipad.

As for self-managing. I own/manage 29 units, ranging from in rents greatly (400-5000). I used Propertyware for the past several years and have had terrible experiences with the people there over the past year due to a billing issue which they admitted to but refused to resolve after about 100 emails and many phone calls.

Buildium is a great system. I have it up and running, and would say I spent around 50 hours setting up all the vendor/banking/tenant information.

Cost is $60/month. Setting up epay bank accounts is $99/account setup. Remote checks are $30/account setup. Premium tenant screening $99 to setup (I think? might have been more). The only other extra charge that I went for was a faster deposit time for tenant epayments. Getting them next day vs 3 days was an extra $.25/epayment.

I never properly did my accounting on Propertyware. I basically used it to keep track of tenant payments and charges. With Buildium I've made a point of making sure all my banking is done properly, all my credit card charges for the business is entered in correctly, and all my bank balances are accurate. Vendors get paid directly from Buildium, either through an epayment directly to their bank, or the remote check system, which allows me to simply enter the details of the invoice into Buildium, and the check is sent to the vendor. 

Part of the learning curve was familiarizing myself with these complexities, and of accounting in general. I spent about a month total entering everything into the system, and going through the help sections, as well as creating help tickets (which were always answered very quickly by tech support).

The convenience of having everything in one place is worth more than a few dollars a month in charges. I don't think you could go wrong with either Appfolio or Buildium. Both seem like fantastic packages.

Are investors actually buying SFR as rental investments in Vegas at a 4 cap? I'm amazed if that's the case. It has changed a lot in a few years...

I would guess that the real return would be a loss. I had looked into MGM units a few years ago and from what I remember, they didn't make any money. I didn't trust the rooms would be rented enough to cover the expenses. How do you control the hotel from renting out it's own rooms instead of yours? What about maintenance on a hotel room that has new people all the time? Liability? Can they be financed? There were too many variables and though I liked the idea, in the end I decided to stick with SFR.

Being able to use the unit isn't that much of a selling point, to me at least, even though I am in Vegas once a month and stay at Vdara often! The rates I get as a frequent guest are often around $100/night and include a large food credit.

I've used Propertyware for about 4 years and have had absolutely terrible experiences with them on the billing side - they overbilled me for the past several years and when I caught it and brought it to their attention, denied it over a period of several months, then finally admitted their error and promised me a refund. 

The entire situation from start to finish was approximately 4 months (Mid September 2015 through mid January 2016), and took roughly 100 emails and over a dozen phone calls. I dealt with several people in the company. When they finally did refund me it was for far less than was overcharged. 

I'm also in the process of putting together the entire email chain, anonymizing the names, and plan on posting all the details in the next month.

I switched over to Buildium very recently, and it seems fantastic for my situation (29 units own/manage). Appfolio was my first choice, but Buildium is more than enough for me and the monthly costs were much lower. The learning curve was quick as well - within a week I had all my data into their system and all my support questions were answer very quickly and comprehensively. I will be activating all tenants and vendors in August so that is the real test.

29 Units, 17 SFH and a 12 unit building. All in Las Vegas/Henderson. I manage 12 of the SFH and will be taking over management of the remainder later this summer.

Most days require 1-2 hours of work (emails and texts primarily). All the properties have been extensively renovated by me and I hand pick tenants. I find that makes the day-to-day management much easier.