All Forum Posts by: Mike D.

What do people recommend for their first real estate partnership? Limited partners who only contribute capital, or several general partners with clearly defined roles? I'm looking to start relatively small to learn the ins and outs of partnerships; maybe raise 50-100k as a down payment for a $500k property. I would be actively involved in the day to day management. Thanks

My mortgages have an early termination fee equal to 2% of the loan balance if the loan is moved to another bank. Do banks generally charge the fee if you've been good long term customer? I want to roll everything into one loan at a more customer service friendly bank. The notes are on 5 year balloons which are about to expire.

I would make it a priority to buy some real estate. If it turns out you like it and become good at it you'll make a far better return than any student loan interest rate. Just don't over leverage yourself.

Get it for a good price and why not.

I would hold it. If it's in a great area the value is not going to decrease, right? Might as well bring in the cash while you can knowing it will be an easy sell if/when the time comes.

I'm looking into condo investing in my area. If some of you wouldn't mind sharing, what is your typical cash flow that you see from your condominiums? Most of the rental grade condos in my area go for about $750/mo with the tenant paying all utilities. Most are in the $70,000 range. I'm calculating about 13% of the rent revenue left over each month. Is that in the ballpark?

$750 Rent

- $100 HOA Fee

-$100 Property Taxes

-$40 Insurance

-$311 (20% down on $70,000 purchase price, 25yr am.)

-$39 (annualized 5% vacancy)

-$65 (annualized supplies & repairs of $750)

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$95 per month or 13% of the income.

Thanks for the info Roy! It's (4) two bedrooms, but they are small units. The tenant mix is 1 person, 2 people, 3 people, 3 people. So there are 9 people total, but I know they don't use the shower all at once. There are dishwashers in each unit and a common washing machine which might be a factor too. The 60 gallon sounds like a good solution.

How's the parking lot? Carpet condition? Windows in good shape? Those would be some big hitters that you may have to repair/replace. That asking price seems a bit high considering the rents and the population of Columbus. Other than that those expenses look pretty close to my 4 plexes. Good luck!

Originally posted by @Roy N.:

@Mike D.

Have you taken any usage measurements on the existing tank?   $20/mth in gas sounds cheap for an older style 75usg natural gas storage heater ... perhaps you could get away with a 60usg tank and save a little upfront money and have lower standby losses.

 That's what I was wondering too! My concern is that that it would run low during peak demand. It's a 4 plex so there could be 4 people in the bathroom at once, but not likely. Thoughts?

Originally posted by @Roy N.:

Originally posted by @Mike D.:

I had a 75 gallon gas water heater go out last week. The hot stack cost $850 at Menards. The newer water heater is a power vent unit ($1300) that requires PVC vents to the roof/wall and a 115VAC outlet for the blower. The cost with install will probably be double the old unit.

If you have an old water heater now is the time to replace it while the hot stack are still available!

Sounds like your new heater is direct vent - pulls its air from outside rather than from the conditioned space.  Is it also a condensing unit?  If so, it will considerably more efficient than an older draft/convectional flue heater and will not suck warm air from the conditioned space for combustion.   A modern, power-vented, condensing water heater is 20% more efficient than an older draft/convectional flue water heater.

The upfront sticker price is normally <10% of the lifetime operating costs ... if you compare an older convectional flue gas water heater (EFT 0.60 - 0.75) to a new sealed-combustion, direct vented, condensing water heater (EFT 0.85 - 0.90), the newer should more than make up for the sticker difference over its life.

Yes the new heater is power vent.  I realize it saves money over the lifetime, but my monthly gas bills are about $30, $10 of which is a service charge. It will take many years to recoup the extra $700 for the power vent.