All Forum Posts by: Taylor Green

Thanks for the input Adam, you made some really good points...

I really like your idea of pre-renting the units before closing, of course using the proper leasing agreements...

@Adam Johnson undefined

Thanks again Jon, I am new to this! I only own a couple of single-family homes and I bought every one off investors with a long-term tenant in place.

This is hopefully my first multi-family deal, and I've been using the 55% rule for block construction buildings and 60% for older non-block buildings to make my initial analysis because the owner pays water/sewer.

I have had my agent run the rental comps, as well the purchase price per unit in the area , and the comps seem to be right in line with what it is being rented for, as well as driving around the area and calling every for rent sign I saw to confirm the prices.

After getting quotes for insurance, property management, taxes, as well as leaving 10% for maintenance, 12.5% for vacancies/credit loss the only thing I can't confirm is the cost of utility usage yet. The MLS told me what it cost him for the last year, but I will confirm that during the due diligence period...

I have never thought that the seller would scam me like that, but I will check it out to make sure!

@Jon Holdman undefined

Thanks Wayne, I've just never got a place without having tenants in place already. I know I have to get comfortable with the idea of filing vacancies. Thank again.

Thanks for the response Wayne and Jon, I wasn't quite sure how I should approach it. I was thinking I might counter back with an offer of 2-3 months of vacancy costs for each property as well as the costs to make the units ready?

Wayne, I just had my offer price accepted and they countered back with a couple of requests, as well as the information that 2 tenants will be moving out. So I believe I can counteroffer their counteroffer? Thanks!

@Jon Holdman undefined

Hi,

I have had my first offer accepted on a 6 unit (2 tax parcel) "fully leased" property. After my original offer was accepted, the seller informed me that two tenants are moving out in 4 weeks. I wasn't able to get the lease agreements before an offer was accepted...

My question is: How much should I change my offer with this new information and also how do I calculate it for the future?

The area has a good occupancy level and the units shouldn't be too hard to fill...

Thanks for all the responses. All very good points. The feeling I'm getting is, if the property is in decently good shape my best bet is to just have regular insurance and pass on the warranty...

@Jon Holdman Your point about companies making a profit off of me buying a warranty basically makes my decision right there! I guess it's common sense! Thanks to everybody who helped out...

Hi,

I was wondering what everybody thought of putting a warranty on their rental property? Do most people have a warranty on their property, or do you just put insurance on it? Thanks!

Thanks again Sharon!

How would I go about asking for that information? Do I simply just ask my broker for the sellers tax returns, P&L's, credit card statements, utility bills...etc, and then send it to my attorney to determine if they are correct? Sorry, I'm just not sure how the actually steps work in this case! Thanks...

@Sharon Tzib

Thanks @ Roy N. I do agree with your points. I guess I should be a bit more clear on the location.

The location is in a lower-income C grade type area (Comps are $575-600 -1 Bed, $750 - 2 Bed). There is a small college campus located about 6 min away, but for the most part I think the property would attract older low-income couples, or working single parents. I hope this helps. Thanks

@Roy N.

Hi,

I am wondering the pro's and con's of owning a small multi-family property (6 units) of all 1 bedroom units...

I have never put in much time or thought to owning a complex with only 1 bedroom units, I guess I have always assumed it would mostly be two bedroom units with the odd 3 bed and 1 bed unit. I have always thought that 1 bedroom units would be harder to fill because families wouldn't be interested... Not sure if that is the correct line of thinking?Just wondering what you guys thought?

Thanks.