Contractor · Atlanta, GA · Member since 2015 · 236 posts · 91 votes
9y
@Yoni Rozenstein I would have to agree with the others on your capex. 2004 is a newer house, but keep in mind that means the water heater, hvac system, roof, etc are all 13 yrs old. So in the next few years, all of these will need to be replaced more than likely.
Also, if you don't have one already, I would love to recommend a management company to you for your acquisition. I am a third-party contractor for them, so I am a little biased. They manage for a lot of out-of-state owners as well as out of country owners.
Seville, OH · Member since 2016 · 30 posts · 6 votes
9y
Are you sure your capex rate Is right at 1%? Seems awfully low. Not sure if that's a typo and should be 10%? Only budgeting 220 a month for twenty homes is nothing.
Covington, GA · Member since 2014 · 295 posts · 93 votes
9y
Hi Yoni. I would have to agree with Jerad on this one. CapEx seems a little on the low side for 20 SFH's. Even though they are relatively modern homes, having a better cushion would prevent you from dipping into your cash-flow for any big ticket items in the future. Also, does the Total Cost for Project of $1,250,000 include rehab or is that just for acquisition? I didn't see the figures for this. Another question would be have you had a chance to pull the actual taxes on each property. I ask as the properties in Atlanta have County and City taxes, and depending on the area, they can add up to be pretty steep. Lastly, have you contacted some property managers, to get some rates? You may find that that number may go up as well. Just my initial thoughts good luck.
Contractor · Atlanta, GA · Member since 2015 · 236 posts · 91 votes
9y
@Yoni Rozenstein I would have to agree with the others on your capex. 2004 is a newer house, but keep in mind that means the water heater, hvac system, roof, etc are all 13 yrs old. So in the next few years, all of these will need to be replaced more than likely.
Also, if you don't have one already, I would love to recommend a management company to you for your acquisition. I am a third-party contractor for them, so I am a little biased. They manage for a lot of out-of-state owners as well as out of country owners.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9y
If it's in Metro Atlanta, why would there be HOA fees? I don't think there are anyHOA' subdivisions intown. Or is this in the suburbs?
Rent rates sound low for suburbs - seem more in line with something in my neighborhood - Pittsburgh, close to Downtown Atlanta, but there wouldn't be any HOA fees. $ 700-850 for SFH sounds like low income neighborhood. But if that's the case, then the price of about 60K per house seems too high.
I would agree with the overall evaluation. Your expense numbers are too low for my comfort. 20 individual properties. That's 20 roofs, HVACs, Hot Water Heaters, who knows how many appliances. I would definitely go with 10% CapEx. If @Michaela G. is correct and these properties are in lower income areas then you may have higher turnover rates. Which means increased maintenance and repair costs. You should also consider the other miscellaneous expenses such as; Pest control, Legal, Accounting, Marketing, etc.
Hi Yoni. I would have to agree with Jerad on this one. CapEx seems a little on the low side for 20 SFH's. Even though they are relatively modern homes, having a better cushion would prevent you from dipping into your cash-flow for any big ticket items in the future. Also, does the Total Cost for Project of $1,250,000 include rehab or is that just for acquisition? I didn't see the figures for this. Another question would be have you had a chance to pull the actual taxes on each property. I ask as the properties in Atlanta have County and City taxes, and depending on the area, they can add up to be pretty steep. Lastly, have you contacted some property managers, to get some rates? You may find that that number may go up as well. Just my initial thoughts good luck.
Thank you Jay
1.25m$ Including rehab, Thanks for your offer, we have our own management company.
@Yoni Rozenstein I would have to agree with the others on your capex. 2004 is a newer house, but keep in mind that means the water heater, hvac system, roof, etc are all 13 yrs old. So in the next few years, all of these will need to be replaced more than likely.
Also, if you don't have one already, I would love to recommend a management company to you for your acquisition. I am a third-party contractor for them, so I am a little biased. They manage for a lot of out-of-state owners as well as out of country owners.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
9y
My main objection is: you're paying close to full market value. I would be expecting a MUCH larger "bulk buy" discount, especially if you don't get a chance to "cherry pick" the good 'uns. My 2c...