All Forum Posts by: Samantha Magina

I've done my homework and I can now analyze a small multi-family (2-4 units) in a few minutes. I'm working on getting my first deal. That said I'm quite enjoying the BP podcasts where folks just jumped head long into partnerships and/ or syndications for larger apartment complexes. I had this property catch my eye while I was perusing the MLS for fun.

This property is a 55 Unit in Foxboro, MA with a mix of 1, 2  units, 1 and 2 BR units for for between $1645 and $2400, according to rental information available online, rent.com indicates 8 units are currently vacant. For the sake of my analysis I'm going to assume all units are $1700/ month so that it is conservative. 

List Price: $11,000,000

RE Taxes: $89,582

Gross Income listed at $38,100 so lets assume that is not correct information. 

My assumptions:

At least 1 on site manager and 1 FT or 2 P/T / On-call maintenance staff, with outsourcing of lawn care, snow removal and possibly items such as unit turnover (paint, flooring).

I (and lots of my closest friends, business partners) fund 10% of this deal and I get a loan @7% for the remaining 90%. 

Income (@ current occupancy of 85%) =                             $79,475

Expenses:

2 FT employees ($20/ hour*320) =                                         $6,400

Mortgage =                                                                               $65,865

RE taxes =                                                                                   $7,465

Monthly Net Income before R&M, Insurance, CapEx and Vacancy . = $-255

I don't know how to properly estimate R&M, Insurance, CapEx and Vacancy but just the expenses above indicate that the 11 million price tag is far too high for my taste.

Who want's to explain to me what I am missing to analyze this deal? 

Hi Christian, I’m local to your area, familiar with RI taxes and would be happy to answer any of your questions.

Are your tenants / roommates allowed pets per their lease? I think you need to stick to the lease on this one, if pets are approved allow your friend, if your other tenants can't have pets then the last bedroom should be held to the same lease agreement for the harmony of everyone. 

I'm watching a few auctions in NY right now and this disclosure caught my eye. What is a household member? is that a person that owns stock or is it a person that has a bank account? I'm stumped. 

• Bank of America, N.A. associates, household members and business partners are prohibited from purchasing REO properties, either owned or serviced by the Bank, whether directly or indirectly.

Agree with above, 1040-ES, at this point you’d make the Q4 payment.

Volunteer, join groups in the community, create a connection with people in the community so you become a resource that people want to seek out. This advice works well for most professions, I just gained a tax client, while I was at bowling league because we both got our RE licenses this year and he felt comfortable with my first hand knowledge of both being a real estate agent and my experience as a CPA. My brokerage has us in our initial training create a list of 100+ names and categorize them (active, likely to buy in 6 months or less, family that will talk to their connections, friends that will be your mascot, cold connections) and has a suggested amount of “touches” per year for each category to keep the list active and fresh. Send out new agent cards, offer a CMA , send holiday cards etc. Also go check out all the homes for sale in your office and any open houses in your area and learn your market.

Wouldn’t taking the door off and turning off the heat hurt you and heat his area?

I agree with previous poster, both sides may have obligations to real estate agents because of contracts or prior history. That said, you can find the owner of almost any property through public records, so never assume the real estate agents have all the power and that you have to use them to contact a seller if you feel confident in handling your own transaction. Self employment shouldn’t be an issue if you have 2 years of tax returns showing you meet whatever numbers the bank requires.

Have you been inside the property? A quick craigslist search indicated that even a 1 bedroom /1 bath could go for $800-1000/month, so depending on condition I don’t know why you wouldn’t be expecting to move the rents to 1200-1300/month or higher, again depending on interior condition and neighborhood. Property taxes at 3k seem in line with the area.

I'm not a landlord yet, but I do analyze quite a few possible deals in my area as I'm a "wannabe landlord" and a new real estate agent, what I've gathered from the forum and the podcasts and webinars is 1) what is your minimum desired income per unit/ door? 2) what would your offer need to be to buy the property  to achieve that desired income?  Figure out those answers and see if the owner is interested in that price. Best of luck!