All Forum Posts by: Jonathan Johnson

Hello Peter, 

I'm here in Charleston as well. We should connect sometime.

@Jinglei Cui $260,000

@Vee K. Thank you for your insight/questions

1. I believe the competitive price to be over $115 the current rate. I intend to raise only to $100 higher. I have no way to guarantee I can make the 90% rented, but with adding online marketing I will reach a much larger audience than who is currently able to find this property. Most all of the units are able to be rented.

2. The landscaping is minimal. It's mostly a paved lot, but I do intend to manage myself. Pest control as well as I have had some experience with that in a general sense. I intend to hire a cleaning person for move-outs. Advertising and accounting I can manage myself, my wife is a CPA and teaches me to keep my ducks in a row.

3. The taxes and insurance - I am not sure just how much those will change after purchase.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $150,000
Cash invested: $15,000

4-unit apartment house. One 2br, Two 1br, and an efficiency apartment downstairs. Shared space has washer/dryer hookup.

What made you interested in investing in this type of deal?

Moved into one of the units while renovating bathrooms and floors. Needed two new bathtubs and replaced all carpet with vinyl flooring because I wanted to rent to people with pets (major shortage of pet friendly apartment opportunity). Other three units paid for the mortgage and repairs with $6,000 cash back from seller for repairs. Now the property pays for it's mortgage and our personal mortgage.

How did you find this deal and how did you negotiate it?

I negotiated it down a little, but the major benefit was the cash back for repairs. I think we did that under the table.

How did you finance this deal?

VA-Loan for veterans. As long as it's 4 units and under, and you intend to live in it. They finance 100%!

How did you add value to the deal?

Vinyl flooring, and paint from Sherwin Williams "Oops" stock ($1 per gallon of mis-tints). I did have to replace the electric meters which cost me somewhere between $700-900.

What was the outcome?

This property cash flow's great! I'm not sure if I can refinance because of the new higher income, but I intend to own it till I die.

Lessons learned? Challenges?

Stick to your screening convictions. The previous owner was renting to felons that were not OK to have with my young family. Often with lenders you can push the first mortgage payment out a month so you're in there for 1 to 1.5 months before the first payment. I used this to ask the tenants to leave, fix up, and re-rent.

Here's the numbers I've been able to run so far:

Explaination:

Rent increase due to about 30 other comparable apartments in the area are averaging $115-$125 more than these if you take into consideration a $100 utility added. These apartments include all utilities and cable (I know right?). I plan on raising rents $100 to competitive rates and since rents have not increased on the apartments in over 7 years.

Vacancy They currently do not market their vacancies from what I can tell. I tried searching for them online and couldn't find any. That will explain the 15-30% vacancy rate. I easily get a ton of hits from my TenantCloud app that markets listings to apartments.com zillow and a few others.

Repairs & Reserves Currently 2 maintenance guys are getting benefits and doing the repairs. The material cost seems to be $30,000/yr but I'm not impressed by what I've seen done on the property. I will do most of the small stuff myself and hire out the rest. 2 maintenance + one prop manager are getting some $110k/year that I will be replacing.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $127,000
Cash invested: $3,000

Bought this house with a VA loan and no downpayment. Lived in for one year and now rent it out. SFH I rent for $1200/mo with a $50/mo pet rent.

What made you interested in investing in this type of deal?

Using the VA loan is very helpful. I made sure that the purchase price was fair and it's in a good rentable location.

How did you find this deal and how did you negotiate it?

Always negotiate. The rule is: If you don't feel embarrassed with your offer, it's not low enough. I always want to see a back and forth of 3 or 4 prices. In this case they were asking $140,000, I offered $115, they offered $130,000, I offered $125,000 and they accepted. The $127,000 is the VA loan price and some closing costs that were tied in.

How did you finance this deal?

VA Loan for Veterans. Thank you submarine service.

How did you add value to the deal?

Replacing pink carpet in the bedrooms with vinyl flooring. New paint, new microwave, and a kitchen back-splash.

What was the outcome?

Cash flowing nicely!

Lessons learned? Challenges?

One challenge was the front door frame became dislodged from the house a little bit. The frame was also covered with a metal sheething that I had to remove in order to drill 4" masonry screws in. I learned the value of a impact driver.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

USAA > Navy Federal for mortgage customer service.

Hello BP,

I have a goal of 100-units and I currently have 5 and a full time job. An opportunity to purchase 60 or so with apartment and several SFH has come up with an option of owner financing.

The opportunity lies in that they are top heaving with paying $100k/yr for 2 maintenance men and the property manager. The spread is approximately:

15 efficiencies for $600

25 1br apts for $700

13 2br apts for $800

7 SFH for $800

All primary utilities included, which for the area is about $125 under market.

The complex is about 90% occupied and putting all the profits back into repairs. I still need to see the condition of the insides of the apartments, but they don't look too bad. I estimate about $1000 repairs per apartment and $2000 renovations per apartment.

The owner is open to owner financing and I'd like for it to be the down payment.

I will most likely start an LLC during the purchase if my offer is accepted.

How do I calculate the price of repairs & renovations & operating costs? I get lost when I'm scheduling a commercial loan + owner financing for the DP + repairs/operating 

Looking back on this post, I have an update!

Moved in, did many repairs and replaced all tenants with new leases. The property is cashflow positive and only needed minor upgrades. I replaced all carpet with vinyl flooring so I could market for pets, which I charge a $50/mo fee. People flooded to get an apartment that allows pets. So every year I make $2400 extra just to allow pets with the pet rent.

Love this property.

I am considering an apartment and sfh block for sale that looks favorable and there's a possible owner financing.

Does anyone have experience with lenders that allow the seller to carry the downpayment? For example: BANK FCU lends 85% of the purchase prices and seller carries a note for the 15%?

I loved Metz Title Company, super fast and friendly.