All Forum Posts by: Sean Morrison

Hi all, had a question I thought I might crowd source. I'm putting together a presentation on estate planning for real estate investors (don't worry, not trying to sell you anything). I was wondering, as investors, what your most important questions would be regarding estate planning and wealth transfers if you were disabled or died?

@Ronald Rohde Could you explain a bit about that? It would be too expensive to add meters based on the rent they're paying? And how would individual shared billing work?

Thanks everyone for the help. It looks like if I move to a 30yr mortgage and keep my offer at around $285k, that would leave about $800 in cash flow each month. That plus some value-add opportunities may make it worth something.

@Ian Walsh and @Brandon Brown - the main reason I'm nervous is that I have no idea what I'm doing with this property. I went in looking for a small 4-duplex, and ended up finding an 8 unit in an unfamiliar area. Obviously, it raises issues I wasn't prepared for like finding a larger down payment, learning how to deal with more units, and how to work in a C class neighborhood.

@Account Closed Thanks for jumping in. You're right - they're asking $330k plus I'd want $20k for upgrades and unforeseen repairs. I'd be looking at a 20yr at 5% with 25% down. Some expenses were combined simply to make it fit a screen easier.

So I should be basing an offer on $75-$100 cash floor per door in other words.

@Jim Kilian I think there is room to increase rents to at least $700, which would be a significant improvement, and maybe set up individual water units so that they pay it themselves. I'm not moving into any units. 

They're currently asking $330k, and I figured at least $20k for upgrades as tenants turn over. But I don't want to pay a price based on possible value adds that I would do - just what the property is currently worth.

This deal is really outside what my initial criteria were - which was 2-4 unit multi-families in B class neighborhoods. This is probably a C class larger multi. 

In a failed attempt to buy a smaller 4-unit multi-family property, I stumbled across an 8 unit deal in Pensacola. This was going to be my first deal, so I'm not really familiar with the larger multi-family dynamics and wanted to see if this deal made sense. Each unit is 2bd 2bath going for $600. Here's what my monthly estimates look like:

Insurance (includes flood) - $450

Maintenance and capex - $530

Mgmt - $480

Vacancy - $480

Water and lawn - $415

Taxes - $350

Mortgage - $1730

Total expenses - $4435

Income - $4800

Cash flow = $365

Does this make sense? I know CapeRate is supposed to be in there too, but haven't figured that out yet.

@Matt K. You're right that's it may be part business. I'd much rather it be REI if I could simply rent out the main house. To be honest, I'm not interested in starting a wedding venue business at all. At best, I would rent it out to someone who was. Has anyone successfully rented out a house on this kind of scale?

Maybe a better way of putting it is that I do not want to start a business on this property. I'm more interested in creative ideas of who to rent to.

I came across an interesting deal. It's a beautiful very large home on the bayou with 3.6 acres. Very Louisiana. It's well below market, mostly because there isn't much of a market for bayou mansions around here.  The boathouse has a 1 bdrm above it, and there's a 3bd/1bath cabana house, with two large party rooms. The main house has 3 bd/2.5 baths, but tons of other rooms, a huge office, sun room, crazy kitchen, pool. There's also a 2700 sqft mechanics garage, with lift, office, and everything. 

For me to even consider it, it would need to completely cash flow. I figure I can rent the 1bdrm and cabana house. Use the party rooms for wedding and event venues. But what do I do with the main house? I can't imagine there's much of a rental market for mansions, and we don't have enough visitors for Airbnb. And that mechanic garage?

What creative things could I do to this property to make it generate revenues?

Thanks guys. So get the thing under contract, and then dig deep.

I found a potential deal where the numbers almost work out too well. It's a 4-plex in a decent beach community a few hours away. The tenants are inherited, which has me nervous. The deal comes from a wholesaler, so it's a bit difficult to get information that could shed light on things. He says the tenants are great and there are no repairs needed. But it's also listed on Loopnet and nobody's bought it yet.

So, my question is, where should I be looking to try to debunk this deal? My thought is that if I try to debunk it, and I can't, then I should buy it.