All Forum Posts by: Tom C

Scott,

I understand what you are saying, but actually if I would use the lack of sale data in my area for the reason not to buy, I wouldn't have a single property. If there are no zoning and inspection issues, 21 to 23 on this property would make it a winner.. But that is a big if, because most of these LL around here don't even have dwelling permits and after just going through what I have with this city on inspections, that really does change the rules of the game. As a matter of fact, that may be the answer. If they can show me that they have 3 current dwelling permits then it just answered my question.

Thanks for all the advice.

John,

Other then checking with the city zoning department, which says its zone as being a residence, what should the owner have to prove that it can be used as a triplex? Is there some form of documentation?

Thanks

Thanks for the reply.

Addressing Ohio, why wouldn't it be approved for a 3 family? We have many duplexs and triplexs that only have one set of utilitlies and the owner pays all. As a matter of fact that seems to be the norm in my area. As how would my realtor get paid if I went owner finanicing?

John,

To answer you question about comps. Nothing comparable is selling in this area and hasn't been selling for well over a year. I do see your point about banks having a problem with this, I just assumed that they would then go off the tax accessed value. Also, I am not sure what you mean by the utilities being legal. As long as they are up to code, it doesn't matter if all apartments are on several boxes or the same one. This also applys to hot water heaters and furnaces. Since this is still a residential property, commerical rules do not apply.

Thanks

Triplex asking $29,000 offer $25,000. Comps none available, tax assessed $46,000 reasonable guess $32,000 to $35,000.

Tri-plex 1st floor: 1-2 BR, kitchen w/new ceramic tile & oak cabinets, remodeled bath,previously rented for $400 + utilities. 2nd floor: 1 BR, remodeled kitchen & bath rents for $300. 3rd floor: efficiency + kitchen & bath, rents for $285. Owner pays utilities for 2nd & 3rd floor apts. 2 furnaces & electric boxes.

Rents

1- 2 bdm 1 bath = $400
1- 1 bdm 1bath = $300
1- 1bdm 1 bath = $285

$985 / 2 = Net $492

PITI 27K @ 9% for 20 years = $359

Cash flow = $133 / 3 = $44 per unit.

The unknown here would be the cost of utilities and could certainly turn this into a loser real fast. Most likely owner is paying utilities to get around obtaining multiple dwelling permits. Would definitely have to convert all 3 apartments over to electric baseboard heating and a 3rd meter would be ideal, which is an unknown cost. Keep in mind I haven't conducted a walk through. The location is a plus. If anyone has ideas on obtaining funding let me know. Listed on MLS, so owner financing is not an option.

Minn,

Thanks, yes this is my first investment, although I was raised rehabbing personal properties and have done it every since I was a kid. Now I just have to make the correct choices with the rental side of the business and am counting on a lot of help from people around here. Word of mouth is getting out and I have 3 other 'clients' that want to rent from us. I think my business plan is something that is really needed in my market. The LL's are old, tired, rude and treat renters like dirt. I am sure that most of it is justified, but they are still a client and until they prove to be a bad client, I can't see treating them poorly.

Perhaps giving them a blue walls if they request it is being naive, but if it cost the same, why not customize the home to their taste a little. They may be low income, but one thing I learned from being a cop is that even low income people have the right to be treated like humans.

Willing to bet Mike will jump on this one. :)

The formats pretty ugly, but it will give you some idea.

Detail of Income and Expenses

2007 Tax Detail Report


Date Paid to/received from Unit Memo Pmt/Ref Mileage Income Expenses TOTAL

Income $0.00
Rent Received $0.00
Royalties Received $0.00

Expenses $5,287.35
Advertising $0.00
Auto and Travel $0.00
Cleaning and Maintenance $350.00
Maintenance
6/16/2007 Joe Siedel Basement cleanout and painting Cash $150.00
7/9/2007 Joe Siedel Outside painting $200.00
Commissions $0.00
Insurance $125.00
6/9/2007 AllState Insurance 3 months $125.00
Interest (Nonmortgage) $0.00
Legal & Professional Fees $0.00
Management Fees $0.00
Mileage (Estimated rate: $0.445 per mile) 0 $0.00
Mortgage Interest Paid to Banks Enter
Repairs $2,540.42
5/19/2007 Moldstat Plus CC $48.49
5/28/2007 Base Board $60.16
5/28/2007 Misc Supplies For House Paint brush, rollers ect.. See home depot reciept $96.81
5/28/2007 Pumbling Supplys $6.90
5/28/2007 Qtr Round $38.46
5/31/2007 Jon The Plumber Fix gas line $125.00
6/6/2007 A-Smith Contracting Front Yard Gas line repair $850.00
6/6/2007 Grace Exterminating termites $894.60
6/9/2007 A-Z Construction Roofing fix.. Jessie, no reciept Cash $300.00
7/23/2007 Carl Furnace Repair Furnace Fix $120.00
Supplies $2,346.93
Appliances
6/24/2007 Jon Rich Frig, Oven, Dish washer $100.00
Other Supplies
5/17/2007 Allman Supply Battery for lawn mower $35.62
5/19/2007 Used Lawn Mower Cash $40.00
5/25/2007 Bills Super Pawn Used Lawn Mower $40.00
5/25/2007 Bills Super Pawn Ladder Debit Card $90.00
5/28/2007 More Supplies Allman Supply $38.82
5/31/2007 Big Lots Supplies for the house $25.19
5/31/2007 Wal - Mart Supplies for the house $171.81
6/5/2007 Allman Supply Plumbing supplys $30.42
6/5/2007 Home Depot Sprayer, wood filler $89.71
6/5/2007 Home Depot Faucets, paints $113.73
6/5/2007 Home Depot Paint $76.65
6/6/2007 Home Depot Bathroom repaired $107.52
6/6/2007 Lowes Returned 2 items $138.05
6/9/2007 Harbor Freight Saw blades $17.99
6/10/2007 Handy Man Hardware Roofing Supplies $20.77
6/10/2007 Lowes Kitchen Hardware $15.50
6/13/2007 Harbor Freight Dolley $35.99
6/13/2007 Lowes Bathroom Repair $46.90
6/13/2007 Wal - Mart Paint $161.14
6/16/2007 Home Depot Bathroom Supplies $20.60
6/16/2007 Home Depot Bathroom supplies $19.16
6/16/2007 Rental Corial High Presure washer rental $30.00
6/23/2007 Handy Man Hardware $10.52
6/23/2007 Handy Man Hardware $19.80
6/23/2007 Lowes Basement Paint $75.35
6/23/2007 Lowes Front porch $159.42
6/24/2007 Allman Supply $10.98
6/28/2007 Home Depot $31.64
6/29/2007 Lowes $3.17
6/29/2007 Lowes $47.80
6/29/2007 Wal - Mart $104.93
7/7/2007 Handy Man Hardware Kitchen Floor stuff $28.17
7/7/2007 Home Depot Carpet and Supplies $188.75
7/21/2007 Landscapers Supply Mulch $23.00
7/22/2007 Garden Supply More Mulch $23.00
7/27/2007 Handy Man Hardware Furnace Supplies $18.07
7/27/2007 Home Depot Kitche Tile and water heater fix $136.76
Taxes $0.00
Utilities $25.00
5/25/2007 Water Deposit $25.00
Other $100.00
Office Expenses
5/17/2007 Quicken Rental Property Manager Rental Software $100.00

Depreciation Enter

TOTAL INCOME OR (LOSS) $0.00 $5,287.35 ($5,287.35)

Thanks guys,

Purchase price 23,000
Rehab 5,200
CC 3,600
Holding Cost 420

ARV pretty firm 62,000

Rent monthly 600.00. Sec 8 will only allow me to charge that much and I want this renter, so I was willing to lower it by 50.00. tenant pays all ulitilies.

My PITI 371 per month. If it would be beneficial, I could post the rehab expenses. I use Quicken Property Manager and could pull a report.

For those of you who don't know. I purchased a HUD SFR for 23K on 06/01. It had been vacant for 2 years and was a mess. I estimated the rehab to cost around 3K and completion done in one month. Well after failing Sec 8 inspection and the city inspection last week for little things like a ply of leaves in the back yard and paint flakes in the yard, we got both inspections done today and we are ready to go. The renter is moving in tomorrow. I am around $2,500 over budget due to termites and a gas leak in the front yard. I also didn't expect to pay someone to help me with minor paint jobs, but he worked cheap and I needed to work on more important things. One thing that I never accounted for was all the little things that has to be done that take up so much time. As an example, I worked 2 days just trying to get a funky outlet/light switch to work in the remodeled bath. I finally got mad and just called the company for support. Every day that you spend working on that little stuff, adds time to your project. I can now walk in a house and know that by looking at the windows, that it will take 2 days to fix them for inspection compliance.

So I missed my deadline by one month and my budget by $2,500. The next house will be in better condition, I hope!

I forgot to mention.. It took 3 coats of Kilz in every room just to get the stains to the point where we could apply regular paint.

Robert,

Did you hit the bottle early this morning? I don't have a clue as to what you are talking about. Are you asking questions or making a statement?

and with all HUD homes, your realtor must be a broker for HUD to submit a bid. Everything is done through a online access and you can actually go out and view your bid results. Its pretty cool, but you do have to put down earnest money, 500 to 1000K and you must also have proof of funds or preapproval letter.