All Forum Posts by: Scott Schultz

my opinion is, if you can pay cash for it (not off line of credit) then fine, but if you are leveraged 80% on everything including your house, its a poor choice, now if you have paid for assets with lines in place and a stock pile of cash, do what you want.  

how did you word your emails? if it started with "Im an investor" it goes in the trash, just like most of the users on BP, Everyone is an investor, but only a few have any experience, or money to start playing. if you are serious, call about the specific listing. 

@Peter B. my comment about 90's construction pretains to the low quality material and minimum standards of the time, much of what we would expect to last 30-50 years would be at 20 and look ok, but really be at the end of its useful life, also back then it was common to not sheet the exterior with OSB or plywood, code allowed corner to corner straps made of thin metal, you could literally cut though a wall with a utility knife in 30 seconds. these methods are starting to show issues now that time has passed. yes equity can be forced, but its harder to buy at a discount unless they are significantly distressed. This is all my opinion based on what i have seen, I have yet to make the numbers work on Multis to a point i feel comfortable, so I stick with my SFR's

@Josh Shaw the assumptions on the sheet are a little off in my opinion, for example vacancy is assuming less than 1 unit empty per month, the average complex tenant stays 1-1.5 years, so you can plan for a unit always being empty, so if rent is $650 (as advertised) plus utilities for the vacant unit will be more like $800. also your rehab cost seems quite low, also capX based on what the property looks like from ext, and int photos on-line, it appears to have been built in the 90's so it will need rehabs in the next 10 years, and you need to set aside for a roof, on a building that size its a huge expense. Will you have a onsite handy person? you will have constant repairs. and the property is pretty illiquid if the market shifts, or you need out for some reason. Personally, with a million spent on SFR's you can make way better returns, with a much more liquid asset, and if purchased right, has the greater potential of forced equity. I also would be concerned with the stability of Manitowoc, it has struggled for years, unless you see a change on the horizon, i would be cautious.

I can go to my banker with a deed that i just paid cash for that day, and he will do a term or LOC based on value. not every lender will do that, BUT its not secondary market money, its on the commercial side, AKA Portfolio loan. Also you may need to knock on a couple doors, not every bank has the same guidelines for this type of product, the ones that are more business oriented seem to understand what you are doing better.

First off, lets get a few terms correct, the Tax Assessor, may have an appraisal license, but for the county they do NOT appraise the property, second Appraisals are quite subjective, and can be proven, quite wide in value either way. market value is determined by similar sales in the current market, making adjustments for dissimilar items. 

Second, are you working with a broker on the deal? they can provide comps, but the reality is the internet has all the data you need to determine value.  Learn how to research. Im not going to spoon feed where to look, because if you cant figure out where the info is, you probably are not ready to do a deal like this. Good luck.

would it cashflow on a 10 year amm at 6% if so its a good deal, if it needs 15 year thats an ok deal, how much capX does it need,  there are a ton of other factors, but cashflow it the name of the game. 

If i were to start selling again, (licensed 2006-present) I would market market myself to investors, and really hone skills in REO, short sale and probate. if this is an interest, best place to meet serious investors with access to cash to close, is go to the sheriff sales EVERY time they have them, you may be all alone, and then you see a guy buy one, and then a few weeks later, he is back and buys another, get to know them, they probably have a relationship with someone, but as if you bring a deal, ask if you could write the offer. Learn the investing side, and invest yourself, very few agents own anything other than their own home if that. This area of RE sales is lacking, because those of us who understand it, just focus on investing at some point.

@John Humphries I am not familiar with the laws in your jurisdiction, but I would say we are raising rents to market rent, and we are not renewing your lease. if the laws are like many places, you do not have to renew their tenancy, and if he doesnt leave, you evict. just make sure you follow the rules to a Tee, also review the terms of your lease, and have a copy that he signed to show him. 

good point @Peter B. the other option is Yea we will install new carpet for $25-50/mo more rent.