All Forum Posts by: Steve Morris

Ugh - Since I think the market is shifting towards faster increases in expenses than income (rent), it'd be worth investigating.

Don't know the cost, but water submeters are not that expensive to buy (<$200 each) IF you can install them cheaply.

Electrical sub-meters, don't know, but I'd do it unless I'm really tight on funds.

The idea is that you bill tenants back for their actual usage, which is why flat rate RUBS are kinda dumb.  With a flat number like $50/unit/month for all, that's $50 if you don't use a drop OR $50 if you leave all the faucets on day/night.  The idea is to use less water (very expensive in Portland).

I think that if you can make more off the dollar you borrow than the interest you pay on it - Why would you pay it off?  In addition to it being OPM at risk, you get additional tax-shelter on your income.  Plus as you pay it off, you get more equity (assuming prices aren't dropping) with tax-shelter.

Well, maybe a couple of reasons:

1) You don't need the tax shelter of mort interest

2) You are just happy with getting income on this prop and no desire to expand

3) Paying it off doesn't make you cash-poor

Well, if MLS is it, I think I'd call the service and see if they'll sell you an account.

Otherwise, it can't hurt, but it won't address the good/bad buy question if you're looking at properties.  You'd be better hooking up with a guy that specializes in what you want.  The value a broker adds mostly is who he knows and talks to.

Out of curiosity, what type of senior housing are you looking at doing?  Also Medicare or private care?  Why build instead of buy?

I do senior facilities every so often and like to hear the thought process.

Well, if it truly has never been developed, I don't think a Phase 1 would turn up much since they only look at recorded records and permits.  However, for a couple of 1000, I think it'd be worth it just for the liability shield.

Forgot, if you want to send me an eMail, I can send my 80 page PDF on Buying and Selling Apartments.  It'll answer a lot of questions.

"so lets say theNOI is 100K . if you want to know what price to offer , would you use 6% cap rate or 9-10% cap rate. With 6% cap rate"

Am an apt broker (as setup):

1) I really don't like CapRates due to reporting bias. By that I mean, are the NOI numbers real, estimated, proforma, from buyer, broker. Ideally I'd do it based on representative recent I&E for the property. Unfortunately, you can't be sure of your comp sales calcs

2) Usual process is to get a metric ($/SqFt is usually pretty consistent since you know price and sqft and it adjusts for unit mix) and determine a price.  Then you use comp sales to determine if your metric and price are within range

3) Then write an offer and unless seller says best-and-final only, leave negotiating room.

Didn't see the whole list you had, so do the Phase 1 and get extended title insurance to make sure you know lot lines and any easements.

If you get a lender involved (and even if you don't) you should get a couple of things:

1) Geo-Tech study - This is for the soil to be stable enough to build on

2) Phase 1 Environmental - The person doing this will search title/recorded history for things like buried storage tanks or uses like businesses dealing with hazardous chemicals.  If he finds something, you may need a Phase II which involves soil samples.

Both of these protect you, so even if not required, unless seller recently did them and gives them to you, I'd get them.

This assumes you went to your planning agency and your use passes muster with them and the approval process is not protracted (do you need approval from surrounding properties).  Make sure you go over egress (driveways) on/off the property since DoTs get picky about new accesses to the street.

"The lot size is .23 of an acre. My question is, can it be rezoned somehow or make it to where I can have more rooms built on the lot?"

Go to the planning service for the govt entity (city/county) and ask them what zoning allows you to build - Best way.

If you want to get a variance on zoning and use, be prepared (at least in OR) a protracted process and some money, since you'll need a lot of approvals from unmotivated people (i.e. govt workers and neighbors).