All Forum Posts by: Syed H.

The price is about right for a nice suburb. For a house hack, this is a great purchase. Congrats Bill!    

Also, honestly $170 for a triplex in center city is high. There's very few comps at that price. Maintenance and Capex is much higher in center city than most other areas. People underestimate what a center city building costs to run.

Couple of points:

• Capex/Maintenance will roughly be $1100-$1500/unit/year.
• Insurance is about right but could cost up to $3500-$4000, just make sure you go with a A+ rated firm.
• Water sounds way too low. Plenty of landlords try to say they don't pay the water, but in practice, they do. I always try to talk to tenants to get the real pictures. Don't believe leases. 
• Gas? How is the gas metered? Do they have individual meters?
• Trash is also super low. Probably closer to $2500-$3400.
• Property Taxes: There is something wrong here. Maybe you are looking at only one of the tax lots. Or maybe you are only looking at the City & County Tax and are missing the school tax. I have never seen a 5 unit+ have taxes that low, especially in Easton.  Taxes should be around $10,000-14,000.

I bet this is roughly a 7 cap right now. I would offer a real 8-8.5 cap. Your debt cost is a little high bc you are going for a 30 yr fixed. I wouldn't personally do that but thats up to you. 

You calculations are also off. Your COC shouldn't be 10%, its about 18%. I look for about 18-20%+. But, your number will come down once you reevaluate the NOI.

Just some points without knowing your specific market: 

4% vacancy, 5% maintenance, & 8% capex is laughably low. Especially on 100+ year old buildings & especially if you don’t have scale.

For buildings like this, you need to go through a whole building’s mechanicals and capex items and estimate a monthly capex number properly. 

For yearly maintenance, speak to some small local owners. 

I'm not as cold hearted as some people, but I'm also not so lenient either. But I also believe doing the right thing also has benefits in business that most people don't realize. 

I have some pretty poor tenants. I would work with them as best as I could, especially the good tenants. If they were already great tenants, I want to keep them. Long term tenants keeps expenses low. 

I would try to see if a local organization could help them financially (the Church, housing authority; etc). I've done this before for tenants. Also would put them on a payment plan to catch up later if none of the organizations could help.

Now, I understand this is a privilege for the well capitalized. If I had to eat my mortgage for a few months, I could. For the people who buy crap deals and are underfunded, I would be worried about them. But than again, those are the people that end up selling me their buildings for a loss.

this. A Fannie/Freddie lender will probably be the cheapest money for a deal like this. If you want i can refer you to one. 

Both.

Appreciation game is meant for primary markets. 

& cash flow can go up and down as well.

Neither are guaranteed.

most RE agents are trying (successfully) to close deals with retail buyers. Those are the most typical buyers/sellers.

Investors are a much smaller part of the market. I’d say many RE agents don’t even know how to sell investment real estate for the most part.  

Also every investor calls a RE agent and wants A “deal”. But a deal is different for everyone. & in this market, EVERYONE is/thinks they are an investor. But if you haven’t done any deals, it’s hard for a broker to take you seriously. 

if you have experience, of course. I love houses with foundational issues. Scares away most buyers, especially retail buyers and uneducated flippers. It's nota big deal. Just another thing to fix. Just needs to be accounted for in your offer.

I own class A, B, & C rentals in high demand markets.

I get 3 months upfront for almost every unit. 1st/last + 1 month security or 1st month rent + 2 months security (depending on the state. Lowest I got was 2.5 months (total) for a tenant with great credit and income.

Taking anything under 2.5x rent to move in is doing you a disservice to your business. You WILL get burned eventually. People just don’t pay their last month rent and then you basically have no security for the damage they do.

1. What's your strategy? SFH Flips, BRRR portfolio, Large ground up multifamily development

2. How long have you been investing? 9 1/2 years.

3. What has been your biggest lesson? 1. Find a good partner who compliments your expertise. 2. Don't let the stresses get to you too much.