All Forum Posts by: Tim Herman

@Robert Gibbs hard to analyze without more details. Is it a 500 sf sfh. or 10000 sf 8-plex. Each has a different capex and repair budget. I just looked up property tax for Columbus and it averages over 2%. You would be looking around $5400 per year in taxes. You have a $100 MISC FEE. No PM charge. 

@Raina Vyas not to be a pest, but did you call the employers of the offer letters. Not the number provided by the tenant but by looking up the number yourself. My questions that i ask. Is the employee salaried or hourly. If hourly is there the ability to get overtime. The employers do not usually give out financial information. They may give a salary range. Verify start date. Good luck.

@Raina Vyas do you have the authority to sublease your property. All my leases clearly state no subleasing allowed. If you do then have your verified employment by calling the employers. Look up the numbers and call human resources. Have you talked to previous landlords. I like to talk to the one before their present rental. If it is a big rental company the tenants will have to give consent for them to reply to your questions. Facebook search, 

@Alexandra Isenhour Everything should be in your lease. Notice of termination. Automatic renewal. Timeline. We don't have a copy of your lease and most are not lawyers on BP. Your best bet will be to consult with a local real estate attorney.

@Ewka Kawecki hard to analyze without more info. Is it a 600 sf studio or a 9000 sf 4 plex. Each will have a different capex and repair budget. Have you run budgets for each. Unlikely your taxes will stay that low after that significant remodel. Have you found a lender that will refi after 3 months. Most need 6 months.

@Brandon S. Pangman The better tenants are usually looking to buy a property in the near future. Will your upgrades keep the tenants longer. I don't know. It does make it easier to rent.

@Azaleia Sinclair have you read everything under the education tab of BP. Everyone has a different buying criteria. Certain numbers are readily available. Taxes, mortgage, insurance. The variable expenses are estimates of future costs. It is imperative that you understand how to estimate them. GIGO(garbage in garbage out). Vacancy is a cost, banks underwrite at 5%. Depending on area it could be higher than that. I use 8%. Capex is the major componets of the building. Roof,floors,appliances, hot water heater,etc. Each has an expected life span. Maintenance is a function of time and expenses. An example is using a 5% vacancy. This is the equivalent of a turnover every 20 months. 5/100=1/20. Say it costs $1500 to repaint and clean a unit . Say you average 1 repair per year. It costs me $150 per service call. So in your 20 months you will have 1.5 service calls or $225. $1750/20 month timeline=$87.5 per month per unit. You can use the calculators on BP for 5 times for free. There are webinars scheduled periodically on how to analyze a property. There are free spreadsheets in the files section. To practice analyzing properties just go to zillow and realtor. You may have to call and get the rent roll or you can estimate the rent by using rentometer or zillow rental manager. Always analyze as if you are not living their.

@Brandon S. Pangman you have to look at the cost of recovery. These are made up numbers. If you spend $1500 and get a $100 per month increase. it will take you 15 months to get back your investment. If you spend 40k to get back $400. It will take you $40000/$4800 will be 8.3 years before you get your investment back. Good luck.

@Justice NA So you did a capex and repair budgets and those are the numbers you got. Here is a simple repair budget. How much to do a turnover + the cost of service calls over a timespan. You have a vacancy factor of 5% so a turnover every 20 months. Plug in the cost to do a turnover. Assume $1500 to repaint and clean the unit. Add 1.5 repairs at $150 per service calls. $1750/20 months = $87.50 per month per unit. This already exceeds what you are saving. One item in a capex budget is floors. Go to your favorite flooring stores and ask what the commercial warranty. Most are 10 years or less, that is your lifespan. Don't know the size of your multi so assume 2000 sf of flooring. My area it costs $6 sf to replace flooring. $12000/120 months lifespan=$100 per month for 1 item. Means you cannot even replace the flooring when it needs it. Still have to find other money for roof, hvac, appliances, hot water heater, bathroom and kitchen remodels.

@Justice NA unlikely you can get a loan for4.5% maybe 7.5%. Low down means pmi added to the payment. Unlikely your repair and capex numbers are correct. No PM cost. Good to add them even if self managing. 10-12% of gross. Water and sewer should be the tenants responsibility unless this is a multi family and the landlord is responsible.