All Forum Posts by: Siye Baker

Hello BP

I would love for some more experienced REIs to have a look at the details of a recent purchase my partner and I just completed and give us your thoughts on how you think we did.

THE PROPERTY

The property is a 2 story 4-unit brick multifamily with a basement in Midtown Atlanta. The units each have identical floor plans with 856 sq ft of living space and screened in patios. The property includes a fenced-in back yard and an adjacent parking lot for off-street parking partitioned for 9 cars. The property is a double-lot on a street of single-lot SFRs and MFRs. This provides for the potential to develop what is currently a parking lot into a second income property (long-term goal).

THE PURCHASE

We paid $119k (25% down on a 30yr fixed @ 4.75%) on a purchase price of $476k. This was negotiated down from the $565k asking (it was flat out over priced).

The seller covered all closing costs, reimbursed all of our prepaid items (appraisal, home inspection, land survey, etc.), and covered some of our first year expenses (insurance, termite re-treatment and warranty).

THE INCOME - $3820/month

3/4 units is currently renting at $910. The 4th is at $940.

4/9 of the parking spaces are provided for the building tenants to park 1 vehicle each gratis.

3/9 parking spaces is currently rented at $50/month (charged quarterly) to a neighboring building's tenants who want off-street parking. The remaining 2 spaces are not currently rented.

THE EXPENSES - $3447.32/month

Mortgage - $1862.28/month

Utilities - $387.45/month - I'm starting to recoup water by billing back to the tenants with the new leases. This will reduce this figure by $200/month.

Taxes (City/County/Solid Waste) - $548.94/month

Insurance - $98.50/month

Other Expenses (Vacancy/Repairs/Maintenance/Services) - $550.15/month

BOTTOM LINE

What it looks like now is that before we even bring this property in line with the rest of the neighborhood and up to its full potential, we're already looking at a cash flow of $93.17 per unit per month. Our expectation based on increasing rents (the property is already below neighboring properties in the market) and billing water back to the tenants (something many other properties in the market already do) is that we can push that number to $208.17 per unit per month by this summer when 3/4 leases turn over and $230.67 per unit per month after.

CONCLUSION

I feel like the rules of thumb (50% and 1%) would have lead some investors to walk away from this listing so I'm curious to know how the community feels about it now that all the cards are on the table.

Hello Everyone!

I'm trying to convince my finance/MBA friend why REI is a better business decision than investing in the stock market and I'm not sure he's convinced. What is the best article on BP you've read that compares the two? I'd like to send him one that eloquently describes the concepts of Leverage and Forced Appreciation. He received a 34% return on his stock portfolio last year and I want to show him how he can receive a higher return through these two concepts using Real Estate.

Thanks for your help!

Hi!! My name is Dawn Ramsey, and I'm new to the real estate investing world. I currently reside in Katy, TX and work for the U.S. Army Corps of Engineers as a Civil Engineer. My background is primarily in construction with some land development design experience. I am in the process of writing my business plan to flip single family homes then eventually transition into developing raw land. I look forward to getting to know you guys and being part of the BiggerPockets community! Have a great day, Everyone!

Hi Everyone,

Thank you for a very details recommendation. In summary, I need to consult an attorney using network from local real estate or landlord association. Is anyone from around MA and have additional references for the attorney specializes in eviction?

It sounds like I need to be more aggressive and be on time with them.

All my tenants pretty much pay on the 6th. They told me this is when they will have the pay check. My wife used to complaint why I let them control the date when we pay our mortgage on the 1st.

To my surprise I messaged the trouble tenant this morning telling her that I will be dropping off the “14 day notice to quit” and I was apologizing for doing so. She did not response. How’s about that?

I guess I am happy to spend time and know a forum (biggerpocket) like this exist, where I can learn and improve my investment method and strategy. This is the kind of thing I will never understand – it does not matter how many books/podcast I read and listen to. This is street education.

-Chan-

Joe Gore