All Forum Posts by: Tom O.

So if I was looking in St. Louis, I would look for a 4-unit or bigger. They are dirt cheap down there. I don't know if they are in horrible areas or not as I don't know the area. But look at this one: 
https://www.trulia.com/p/mo/sa...

four units for 300K. 

Look at this search: 
https://www.trulia.com/for_sal...

There's a 4-unit for as little as $225K. 

 Of course an attorney won't do that. But most realtors don't either. Most realtors want the deals to go through so they can get their commission. Mr. Gesner is playing on fear. Fear that these realtors have some sort of "secret sauce" that you are screwed unless you have it. I have four realtors and NONE of them brought any of this to the table. A "team of experts"? Don't make me laugh. Experts at what? 

And please let me be clear on something: I don't mind realtors. I use realtors. I've had a realtor on everything that I have ever bought. They don't really cost the buyer anything and they will guarantee the seller the full price on the MLS. And there are discount brokers who will put you on the MLS for 1% or less.

They definitely can add value to the transaction. But if you have a house to buy there is no real reason to use a realtor and give them a commission. If you want to use them as your closing agent I think that's a good idea but at a flat fee because I don't think that justifies a commission. 

Any? I'm at 4 buildings, 25 doors. Doubled the value of two out of four buildings in less than 2 years. Tripled the equity I started with (down payments). It totally gave me the confidence to run the numbers and buy my first building for slightly over the asking price (over the wife's objections). And has given me this blue print going forward. 

That first building was such a good deal in such a rapidly gentrifying area and helped by my renovation of two of the four units that in less than two years it appraised at twice the purchase price. I pulled $60k out, kept the payment about the same due to lower interest and bought another 4-unit with that $60K. So it's like my second building was free. 

I'm not sure I would have started without having the confidence reading Lindahl's book gave me. I saw the potential of deals because of it. 

I got a guy. He's doing my house in Lakeview and he'll do Pilsen and Little Village. Probably anywhere in Chicago. His name is Alex and his number is: 

He's reliable and not very expensive. Mostly he snowblows and hand shovels. I don't think he has a plow. 

He's also a handyman/renovator/contractor but I have not used him for that. Great guy. 

3Three1-645-61OO

I'm not saying they don't bring value and I'm not saying what they do is limited to filling out the contract. Please don't put words in my mouth. My point is they don't typically justify a commission for a hefty fee on a FSBO deal.

And if you need a lawyer for the closing I'm not sure what the realtor bring sto the deal. If the realtor wants to do it for a flat fee, that's a different story and they may be well worth it. 

If you want someone to throw money at you can hire me. 

But all my genius has come from one book (out of the dozens on RE investing I have read). 

David Lindahl's Multi-Unit Millions. 

I'm going to respectfully disagree. You can hire an attorney for a few hundred bucks to get you to the closing. A RE agent is going to raise the price and take a commission for not bringing much to the table. You can ask them to work for a flat fee. I did that with a FSBO guy. His lawyer wanted $3,500 to draft the sales contract. My realtor would do it for $1500 which we split 50/50.

I would not use a realtor unless you can get them to agree to working on a flat fee. But if you need a lawyer for the closing then you don't really need a realtor as a buyer. 

Questions first: 

1. Well maintained but how about updated? Have the units been updated in 30 years? Are you looking at 16 renovations of kitchens and baths? Floors? 

2. What are the actual expenses? Does it have separate utilities for heat? You don't want to guess at the NOI even if the rents are low.

3. Are they all on leases or month to month? How hard will it be to raise rents? Obviously, you can't get market rent if the unit's are 30 years out of date. 

Two ways to value the building: 1) cap rate; 2) comparables. 

Yes, it's hard to find a true comp -- a 16 unit building. But you can find 4, 6 8 or 10 unit buildings and figure out the area's per unit price. I just saw a 10-unit in Fort freakin' Wayne Indiana that they want $104,000 per unit, which seems insanely high to me based on an NOI of like $60K.

But it's listed by a respectable commercial realtor and God knows every owner has the right to put whatever stupid high price on their property they can and hope for the best. Or, as my Dad used to say: "there's an asking price and a selling price." 

Have you asked the sellers what price they are looking for? You said they want to put it on the MLS so isn't this an exercise in futility? They will put a big MLS price on it or it will get bid up on the MLS. Good luck. Come back and update us.

Most landlords will just require a higher credit score. Most criminals don't have good credit scores. 

 Very interesting. Does Pay Range require an internet connection? Is there a way to convert existing machines to cards or do I need to buy new machines?