All Forum Posts by: Oren K.

Grant,

It's not how many units you have but what you are trying accomplish. Many just want to cover the entry / exit points but there are other areas that should be considered; the parking lot, admin office, laundry room, elevator lobby, etc. I would not recommend wireless cameras since you still have to power them and they are much more prone to interference; might as well run POE.

Check out Security Camera Warehouse. Very little BS, Good Prices, Good quality, Good Service, lots of support if needed.

Oren

I put in 10 cameras in my building as one of the first things when I purchased it. Covers all of the parking lot and entrances. Being remote to the property, I can make sure that grounds cleaning is being done, interior cleaning is on schedule, garbage pickup happens and also check when contractors actually show up and leave. It's not perfect and may still put one in the laundry room but sure helps.

I've even used it as a way to walk contractors around the property (with me on the phone) for quotes with some success.

Almost as a bonus, it is amazing the things you see tenants do.

Oren

Hi Coco,

Never done business with them but as with all turnkey sellers, you need to validate the assumptions they are putting forward.

For example, I saw a recent one from an Ohio turnkey provider that total expenses for Vacancy, Repairs & Capex at 10% of income.

Always do your own assessment.

Oren

Hi Bhavik,

They did not include any maintenance expenses which should be ~ 10%.

Insurance seems high at over $450 per unit

They also assumed 100% occupancy which is unlikely over any reasonable amount of time so cut another 10% of the income. 

Property taxes are based on the current valuation so will go up in due course by the county.

Note that the income works out to ~$450 per unit per month; not exactly a high end rental even if they are all (doesn't even tell you) 1B / 1Ba units.

I do not think the property would perform as the agent is representing and would pass.

A couple of other points to consider;

- Property management: Needs to be fully vetted. You are out of state and managing remotely can be challenging. BP has many people that do this successfully but not for everyone.

- The other thing that struck me was the broker is based in FL (bottom of the Loopnet post and click on the link to all their other listings). Where / how did they get this listing and what do they really know about the property.

Jason,

My experience is somewhat different from @Devin Woods. It ranges from agents promoting 'market rents', full occupancy and unreasonably low expenses to full rent roll listings and multi year T12 month P&L. If an agent is involved and they have prepared an OM, many times they include the rent roll (sometimes even with names and phone numbers!!).

You just have to sign up to mailing list / accounts of sights like Marcus & Millichap or CBRE or individual broker / agents and get their OM's (some ask for CA, some don't).

If you are dealing with an owner directly, it's a different story. My experience is that they will likely be a bit less open until you put in at least an LOI. Even more true if you are dealing with an 'off-market' deal (i.e. you approached an owner who was not actively marketing their property).

Regardless of what an agent or owner present prior to contract execution, make sure you verify everything during the DD period. Prior to the contract being signed, everything is marketing but after it is signed, there is an implied / explicit warranty that the information is correct at that point in time (i.e. they can't just make stuff up) and you can rely on it.

Oren

Firstly depreciation is unrelated to what you damage can charge for. Value on the books and value to you as landlord are two separate things.

If a carpet is old and has some stains and then the tenant burns a patch of it, they are responsible. I have never spoken to a landlord / owner that replaces capital items (e.g. appliances, carpet, roof, etc.) as soon as they are Zero value on the books.

Having said that, unless you have before and after pictures to show abnormal usage it sounds like just stains and normal ware so I don't think they should be held accountable.

@Patti Robertson  Not sure if it is visible / usable from mobile but using the browser interface on a PC, on your 'Settings' page, bottom link on the left hand side is 'Stats' which give you your 'current' score and some other information.

@David Terbeek - I work with Lakeside on the property I own. The owners name is Howard who I have enjoyed dealing with and if you want an e-intro let me know. They will do a variety of deal structures and duration depending on what their investment is (e.g. their machines, your machines, etc.). As far as I know, they only work with card systems machines now.

Daren,

Not a silly question / issue at all and something that many investors struggle with. It may not help but I think you have articulated most of the considerations quite well; Flexibility vs. High(er) Leverage.

At the end of the day, a personal decision.

Aaron,

I can not speak to any special rules for Indiana but in general;

Analysis - Get all the information you can about the property and go through the analysis process. What are the local area rents? What is the local area occupancy? Is this property in-line with those or not (better or worse)? If not, try to figure out why not? Determine what you think the property is worth to you. What are the expenses? Do they line up with what would be expected for a property of this size and rent? Are there any foreseeable expenses coming up (e.g. roof)?

Financing - Are you paying cash or financing? Do you have financing lined up? How much of a down payment do you need and do you have it?

Offer - Working with either the listing agent or your own, put in an offer. IF you are close to the market value, there will likely be some negotiations. If you are not comfortable with this aspect, your agent will help (not always the best resource).

Due Diligence - The offer should contain a stated period of time during which you get to check things out. As Michael states, there many good lists here on BP and discussions regarding various aspects. The bottom line is that this is your opportunity to make double and triple check your assumptions, confirm what the seller is telling you, bring in any professional inspectors to check things you can not and make a GO / NO-GO decision.

Going Firm - This is it; a / the key decision point. At this point, you are committing to going through with the transaction short of any fraud or some other serious misrepresentation. Hopefully you have your financing settled and are ready to commit.

Closing - Between your agent, your lawyer, the title company and the bank (if financing), they will take care of things; you just have to supply the money :).

Good luck.