All Forum Posts by: Adam Steinberger

I have a real estate portfolio worth around 1.5 - 1.75 million. I have a business partner who wants to buy it, but doesn't have the down payment. He's willing to pay a premium if he can figure out a creative way to do this.

I have alot of capital, so what if would lend him a hard money loan for the down payment or write up a contract that all future cash flow goes to me until the borrowed down amount is repaid. Does that make sense?

I currently have 21 doors and have now switched to a local commercial bank called Richwood Bank. The only issue is that they take forever to respond and approve loans. They seemed to be understaffed and overworked. Most of my emails take days for a response. Does anyone know of a good commercial lender around the Bellefontaine, Ohio area?

Current rates:

30% down for a 30 year loan

20% down for a 20 year loan

4.75% 5/5

any help is apprecited!

I appreciate the feedback! Why will placing assets in a trust cut off my growth? So what exactly should I ask for? Lawyers scare me. I don't want to pay for anything I don't need. 

Hello

I am 32 years old, and I currently have over seven figures in the stock market and own over twenty-five rentals worth around $4,000,000 and $500,000 in equity. I will be meeting with an estate lawyer this week. Any tips? J just want to protect my assets and guarantee a legacy for my family. 

Hello BP! Long story short, I have a very comfortable net worth and no debt. I currently have 25 doors (mostly single family homes) and have a goal of 100 doors. With the current market my cash flow has been getting squeezed from $200-250 a door to right around $75 monthly (those numbers account for all expenses, including property management & CapEx). If I am very comfortable financially, have well over the 6 months of reserves for all properties and have the proper financing, how important is a "deal".

Am I wrong to think that what once was 18% IRR, and is now 13% IRR is still a good deal relative to anything else?

Side note: for clarification I have over 1 Million in Vanguard.

Thanks!

Not sure why you are getting those numbers. The total rent is $675 x’s 7 doors per month. $4375 x’s 12 = $52,500 annually. Minus all expenses, even if I paid all cash, I would have around $1200 monthly net cash flow. That's a 10% cash on cash return. 

I am looking to buy an old commercial building in a very small town (750 people) and convert into 7 units here are the numbers: $55,000 purchase $100,000 renovation $15,000 hard money interest Property management: 7.5% plus 25% of 1 months rent for each lease renewal annually. Rent: $625 per unit with utilities included ($4375 total) $20,000 annual utilities + lawn care/snow removal $3000 annual cost for turnover and repairs $2000 property taxes Thoughts?

Do these numbers make sense? They want to include all utilities in the rent and also charge me an annual lease renewal fee per apartment. I honestly feel the fees are way to high, and don't understand my advantage to include the utilities in the rent.

6 plex - 180K

From them:

Financing: 25% down, 25 year term, 4.0% rate (long term loan after renovation complete)
- Closing cost: $2k
- Property tax: $1149.40 (From auditor’s website - 2020 payment amounts made)
- Insurance: $1980 (Assuming 1.1% of value $180k end value - ours runs right at 1%)
- Maintenance: $1800 (7.5% of no-utility rent. Industry averages are 5-15%, so biased downward with lots of renovations initially)
- Other costs: $18,150 (Utilities - $.275 per sq. ft. * 5500 sq. ft. - We see and use $.21-$.22 for our properties, plus lawn care. Hypothetical lawncare cost for  — 1.5 hrs charged for 1.5 mowings per week for 6 months at our hourly rate = $.03 per sq. ft.)
- Monthly rent $3150 (described below, but a huge variable)
- Vacancy rate: 5% (ours is no-kidding negative back to Jan 2019 since we routinely collect extra income for folks that want to move early to buy, etc. Industry averages range from 5%-10% and banks will normally bake that range in too)
- Management fee: 9.5% (based on 6 units - this would be 10% for 5 if we didn’t split unit L)
- Holding length: 20 years (? - we plan on holding until we pass away and give stuff to our kids, or 1031ing. Not sure this calculator will give you and visibility on capital gains taxes to be paid if you do sell at some point - consult your CPA)
- 3% appreciation on all costs/values (the calculator had this as a default)
- This calculator doesn’t have anywhere to set the turnover rate for tenants and the costs that come from that, so this scenario would be with tenants that stayed 20 years - haha. As mentioned, we have an 88% retention rate on our portfolio as of this past leasing season (industry average is ~50% retention), so you could make some sort of guess at how the tenants will act and then multiply half a month’s rent (or $250 min) for each flip done for the leasing fee as an additional cost.
- You can see how all these assumptions can just increase the “beta" of the investment a LOT with each tweak!
Those MANY assumptions spit out a max of $180k total investment to get you 12.23% IRR.

Will be using conventional loan. 20% down with 4% rate. 

Hello I am trying to decide which deal is better, if either.

1. Home price $110,000. Will add $20,000 in repairs and home will he worth $139,000. 
Taxes: $1750
Insurance: $700 

Rents for $1200.

This home is in a nice neighborhood and will rent easy. It will also bring decent appreciation and low crime.

2. Home Price $78,000. Nothing to add.
Taxes: $1100
Insurance: $600

Rents for $850

This home is in a C list neighborhood, and might bring some crime.

Thoughts?