All Forum Posts by: John Sherron

Hey Brent, thanks for the reply! The appraisal is from a year ago they said. But I am pretty familar with the area and the numbers sound about right but of course I would have to check for sure. They also said each property should not need more than about $2K of work so guess its more cosmetic. I live out of town from the properties but its my hometown so im familiar with the area. But i have only seen pictures of the properties. They told me two of the properties have had full rehabs in Jan, 2016 and bought one as a turn key in Dec. 2015.  They said they have replaced the pipes to the mainline in two of them in 2016, put a new HVAC in one in 2016. They have property management with all three and they do only 1 yr contract.  Two tenants extended for another year and one is up for renewal in Aug. PM has been good at placing tenants quickly. PM does twice a year inspections and let them know what needs to be fixed and have been addressing those as needed with permission.   They told me they are selling all their properties because they had relocated to a different state. I have a couple of private lenders available and im thinking that would be my best option if I were to go about this deal and then refi after a year into a conventional loan. What are your thoughts Brent?

Robert, great reply! Okay, this is what the owners told me. I am actually in a different state from the properties, so I have only seen a few pics of the outside as of now. Two of them, they did full rehabs on back in Jan, 2016 and they bought one as a turn key in Dec. 2015.  They said they replaced the pipes to the mainline in two of them in 2016, put a new HVAC in one in 2016.   They have a property management company with all three and they do only 1 yr contract.   Two tenants extended for another year and one is up for renewal in Aug. PM has been good at placing tenants quickly. PM does twice a year inspection and let them know what needs to be fixed and have been addressing those as needed with their permission. They also state that each property should not need no more than $2K each, so I'm guessing its cosmetic work needed. I have a couple potential private lenders that I present the deal to see about financing, so that would most likely be the way I would go about it. After a year I would look to refi into a conventional loan. What are your thoughts Robert?

Hey BP Family, im a rookie here and Im trying to analyze this deal I found and need some of opinions on what my next move should be. Im curious to hear some the expert opinions on this one. Here's the numbers: Purchase Price: $150K Appraised a year ago at: $205K Monthly Rent Income: $2575 Property Management: $257.5/mth Property Insurance: $123.67/mth. Property Tax: $296.9/mth.   NOI: $1896.93.   BP Calculator Stats: Total operating expenses:$960.87 Mortgage expenses:$777.05  Vacancy:$189.70 Repairs:$189.70 CapEx:$284.55 P&I:$777.05 Property Taxes:$296.92 Purchase Price:$150,000.00 Purchase Closing Costs:$3,000.00 Estimated Repairs:$6,500.00 Total Project Cost:$159,500.00 After Repair Value:$205,000.00  Monthly Income:$1,897.00 Monthly Expenses:$1,737.92 Monthly Cashflow:$159.08 Pro Forma Cap:5.48% NOI:$11,233.60 Total Cash Needed:$14,750.00 Cash on Cash ROI:12.94% Purchase Cap Rate:7.49%

I ran the numbers on the BP calculator. Heres what I got: Monthly Income:$1,897.00 Monthly Expenses:$1,737.92 Monthly Cashflow:$159.08 Pro Forma Cap:5.48% NOI:$11,233.60 Total Cash Needed:$14,750.00 Cash on Cash ROI:12.94% Purchase Cap Rate:7.49% Total operating expenses:$960.87 Mortgage expenses:$777.05  Vacancy:$189.70 Repairs:$189.70 CapEx:$284.55 P&I:$777.05 Property Taxes:$296.92 Purchase Price:$150,000.00 Purchase Closing Costs:$3,000.00 Estimated Repairs:$6,500.00 Total Project Cost:$159,500.00 After Repair Value:$205,000.00  Down Payment:$5,250.00 Loan Amount:$144,750.00 Loan Points:$0.00 Loan Fees: Amortized Over:30 years Loan Interest Rate:5.000% Monthly P&I:$777.05  Total Cash Needed By Borrower:$14,750.00 Financial Info Income-Expense Ratio (2% Rule):1.19% Total Initial Equity: $60,250.00 Gross Rent Multiplier: 6.59 Debt Coverage Ratio:1.20 Looking at the numbers how would you judge this property so far?

Hey BPer's! Question? I found a fsbo, that is looking to sell 3 of there single family homes. The numbers are looking good so far but not quite enough information yet to know for sure. They tell me they are selling because they no longer live in the city. I too do not live in the city but have family there (My hometown). What should be my next steps in determining if this is a good deal or not? If so, what should be my next move after? Thanks in advance!

Hey Chris, congrats on the 152-unit hope it all goes well! So when you consulted the management companies, was it strictly for the due diligence phase or were you planning to hire them to manage the units as well? If im only looking into smaller multifamily properties like duplexes, tri's, and quad's would it be neccessary to deal with a management company? If so, what sort of cost could I expect to add to my overall expenses? Are they good to go through for finding good deals? How did you locate the 152-unit property and can I ask what steps you took once you located it? Thanks alot Chris!

Hey BP fam! I looking to start investing in multifamily properties and wanted to whats a good due diligence checklist to follow when analyzing the deals? If you have any good spreadsheets to share I would really appreciate it. Also, when buying out of state what is the best way to go about it? I am a truck driver so im gone over the road quite a bit. Thanks in advance!

Thanks all! I've tried some of the tactics mentioned above but some I haven't. So I will give alot of you guys advice a try!

Thanks so much again y'all! As usual, very helpful!

Hey BP Family, I found an abandon property and when looking for the owner it came up with the full name then it read "Estate Of".

When I went to look up the phone number, I found nothing on this person, so I take it they are deceased. It also looks like it is some taxes due on the property as well (Not much though).

How do I go about finding who is responsible for this property so I can reach out to them?

Thanks in advance!

Thanks a ton for that invaluable information Jeremy! 

The real problem I have is how to start the conversation talking about this touchy subject?

Can you give me some good pointers or scripts I can use as example in starting off the conversation talking to a person about their hardships? 

Thanks!