All Forum Posts by: James Lusk

Has anyone had any experience working with Park 52 out of Tacoma for managing their properties? I am working on a 12 unit apartment deal in Lakewood and want to get some different opinions on the property, rental rates and get some different quotes for management services. If you have either used their services or have heard about them, any input would be greatly appreciated. Thanks!

@Ruth Bayang Congratulations! Where is the property at? What will your rents be? Please do keep me posted!

Does anyone here invest in the Tillicum area and have some insight? I'd be curious to hear what their experiences have been. So far I have spoken with investors that have properties closer to the town center but now down south there.

@Chad Hotovec Thanks! We are still a ways out from solidifying the deal but it is exciting no matter the outcome to make some offers and learn. It's amazing how much you learn once you get the ball rolling. Baptism by fire! There are some questions you would never think to ask until you start working through them as the deal progresses. Best of luck to you.

@Bryan R.Great info! Thanks so much! That could be a large hit. We will check to see if there is sewer available nearby.

@Zach Quick I don't foresee this property needing that extensive of a Reno but time will tell. Your point on the rents seems fair. The pictures show fairly well, but of course they are going to take favorable pictures. We will be sure to calculate all Reno costs and make sure they don't get out of control. 

For the utilities, I actually have water, sewer, garbage, and electric all rolled into that one water/sewer category. Sorry, that was a bit misleading. I haven't seen a P&L or utility bills yet to see if there are any common lights but upon driving by it appeared there are not. The property doesn't have separately metered units so our $625 rents will include water, sewer, garbage. 

That is a good catch for the yard maintenance. The yard is minimal but is still an expense. I will be sure to add that in. Thanks again for your input!

Would you mind sharing some numbers on your 12 unit?

th@Gwyeth Smith Thanks! Congrats on your duplex! We actually found this one on the MLS. We have found many properties that have been poorly managed (imagine that) and haven't kept up with market rents. Of course some are due to deferred maintenance, some are just managers that are lazy or out of state and don't monitor the market well enough. Our 4-plex was a poorly owner managed property that they didn't follow the market and let rents slide to $250 per door below.

The 12 unit seems to be fairly well maintained from a drive by and from pictures but we will get the truth this weekend at inspection. We are going to bring our property manager and contractor along so that we can have all heads in one spot to hammer out any additional costs for rehab or maintenance. We calculated what the price should be and knocked some extra off, threw in the offer fully expecting the sellers to either shut us out or at best counter, but instead they accepted! Of course this could indicate some issues that we aren't aware of. We will see!

sorry about the link. Try this one, it should work. 

https://www.biggerpockets.com/calculators/shared/3...

@Ruth Bayang thanks! Our 4-plex is in Midland. It should have a solid 10% ROI. How has the 4-plex been for you? Have tenants been decent? How about your vacancy?

@Zach Quick We are inspecting this weekend so I will have a better picture after. I had factored in 30k for a rehab budget. We will be negotiating for seller to make repairs or bring down the purchase price if there are any significant repairs needed repairs that are needed in all units that could add up. What in particular seems thin to you? I appreciate your feedback.

Hey everyone. My wife and I just closed on our first 4-plex and in the week after closing, have gotten an offer accepted on a 12 unit in Lakewood. Everyone here was so helpful with our 4-plex analysis so I thought I'd throw out our 12 unit deal to get your thoughts and opinions.

Asking price was $625k, our offer went in at $550k and was accepted. Apparently we could have gone lower. We will see what comes of the inspection and negotiate further according to the results. We are doing this deal with very little money out of pocket as we have found a partner who is just looking to make a decent return on their capital that has been lying in the bank being eaten away by appreciation. The partner is family which of course comes with certain risks but we are all of the same mindset going into this investment, with the understanding that no returns are guaranteed. Everything will be spelled out in our operating agreement that will be finalized this week. Any particular advice in regards to partnering/family would be appreciated.

The property is located just off of I5 by JBLM in between I5 and American Lake. The structure was built in 1958, and is on septic. This would be our first go around with septic. Has anyone had experience with a multifamily on septic? I am a little concerned about the care that tenants will take to not flush certain unwanted items down the toilets.

All 12 units are 1/1 500sf. Currently, the rents range from $375-525. I have not yet received the P&L statement to verify the current rent roll. The cap rate for the area has been a bit hard to pin down as not much multifamily has sold in the area within the last year. It seems to be in the 6-7 range. At a 6 cap, the purchase price should be right around $600k assuming a current NOI of $35,624.

In speaking with numerous local property managers and some local investors, as well as combing through available 1/1 apartments for rent, I have come up with $600-625 a month being market rent. It may take a little bit to get the units up to market but the property should still be cash flowing in the mean time. Once we get the units all at market rates, we should be looking at 1800-2000k a month cash flow. Here is a link to my breakdown of the numbers after rents have been raised. Let me know if any red flags come up and any local knowledge to the Lakewood area would be greatly appreciated. Thanks in advance!

https://www.biggerpockets.com/buy_and_hold_results/222193.pdf

Let me know if there are any issues viewing this analysis

FYI, the breakdown of our property has a high management cost at 12% to start off because we are anticipating some significant work to get the property in the condition we want and quality tenants in place.