All Forum Posts by: Account Closed

@Kyle Ransom Thanks for the comment. As mentioned, I don't need help analyzing, I'm just curious how aggressive removing cable and assigning utilities to tenants it. 

I'm considering making an offer on a 100% occupied fourplex in a class b neighborhood. (2) 2 BR and (2) 1 BR. I'm in commercial real estate so SFH and residential in general is a bit outside my comfort zone.

Current ask is about 215k. Haven't walked the units but pictures look great. Would like some feedback. Details below:

2018 OpEx:

Insurance: $4620

Property Tax: $3360

Water Gas & Trash: $4500

Electric: $600

Cable: $1500

Lawn Service: $900

Total: 15480

I added a 2% growth rate on the operating expenses and a 6% management fee on top of that for my as-is analysis. Incorporated a 5% vacancy. Expenses as-is would be about $17,821. NOI on these numbers is $14,099.

I'm pretty confident in my numbers, but think there's a ton of room to cut expenses. Tenants pay for own electricity. I assume the electricity charge is for the washer/dryer in a storage shed behind the fourplex that is available for tenants.The units are sub-metered, but for whatever reason, current landlord pays for water and gas as well. He also pays for cable which seems generous. I'm not sure if current tenants are MTM or yearly leases, but upon renewal, I have a few ideas. 

1. Bill tenants directly for water & gas. 

2. Not pay for tenant cable. 

3. Rents are below market, but with the changes above, I'm thinking keep the rents as-is to prevent scaring off the tenants. 

As current numbers stand, I'm planning on making an offer at about 85% of ask. If I feel confident that I can make the changes above, I'm comfortable offering about 95%. Are my proposed changes too aggressive/optimistic? Thanks in advance for the help. 

No, I'm looking to build a duplex.. 

bump

Hi all,

Looking for recommendations for homebuilders in the DFW area. Looking to build a duplex. 

Thanks

@Jonathan Anderson I'm from Corpus Christi as well. Where is the property? Have some pretty good knowledge and a few connections that might be helpful.

You don't include your debt service when calculating cap rate. If it's two separate properties, you have two different cap rates. Take your NOI and divide it by (purchase price + rehab costs) and there's your cap.

You're going to have to give us more on the location, asset type, repairs, etc. 

Yep. Your remaining capital at the end of year 1 is: (Beginning capital + Preferred Return) - Cash flow distributed. In scenarios where the cash flow IS suffice to cover the pref, it does decrease remaining capital that needs to be returned to investors. In scenarios where the cash flow does NOT cover the pref, your remaining capital will increase. To answer your question about the sponsor equity, it's on a deal-by-deal basis. GP equity is usually included in the pref but its split pro-rata with the other investors. As in 10%/90% or whatever way it was structured up to that decided preferred return.

@Logan Freeman Sending you a PM now.