All Forum Posts by: Adam Scheetz

Okay, I'll try and make this as concise and equally informative as possible. 

I have learned not to trust the Pro-Forma numbers from most brokers, and for good reason. I will layout what their numbers were and then what mine were and you can give me your thoughts.

Known factors. Good community, steady market growth, good job forecast, populated area, near large military base, and located near major interstates.

BROKERS NUMBERS: 

Triplex: Asking $145,900 ON market for 1 year.

1) Assuming for the sake of calculations 0% down @ 4.3% Interest.

2) Units: 1/1, 1/1, 2/2, 2,800 sq.ft, 100% occupied

3) Rents: $475, $475, $575 (under market by $25)

4) Cap Rate: 9.06%

5) GRI: $18,600

6) Taxes: $2,200 (2018)

7) Op-X: $3,180

8) NOI: $13,220

9) Approx Mortgage: $700/mth

Owner pays water only (approx $40/mth for all 3 units). All utilities are separately metered.

So....I began my own research and number crunching and found several disparities in theirs. Here are my numbers.

1) Rents: $475+$475+$575= $1,525/mth x 12 mths= $18,300/yr GRI (They were off by $300)

2) Taxes: $2,370 (They were off by $170)

3) Op-X: $3,180 (Trust but verify)

4) Building is actually 2,392 sq.ft (They were off by 400 sq.ft.)

5) NOI: $12,744 (Off by $476)

6) Cap Rate: 9.06% (Let's just leave it and see)

7) Approx Mortgage: $700/mth

8) Assuming for the sake of calculations 0% down @ 4.3% Interest.

Factoring all this new info in and for the purpose of simply running numbers. A more appropriate price with a 9% CAP and the actual NOI is $140,662. This is $5,238 less than their asking.

As it stands now without any rent increase or substantial drop in price, I'm looking somewhere at $120/door. After a slight increase in rent up to market standards I'd be closer to $135/door or more. Remember also that this is no money down and no drop in asking price or negotiation. 

I'd love to know your thoughts!

Thank You,

Adam Scheetz

@Justin Windham Thanks for the feedback! I've listened to about 243 podcasts so far over the last year. It's a plethora of info. And everyone has been very helpful.

What's your experience with investing and real estate?

@Kim Stofan I just left Sacramento! I lived in Elk Grove. Thank you for all your sound advice. At this point it's a bit like looking for a piece of Hay in a needle stack. Similar to the California market everything here in the NE seems over valued. That's why I'm looking outside the area. I just need to keep crunching numbers so I can get better and quicker at it.

Thank you,

Adam Scheetz

@Charles Molluzzo thanks so much for the response. I was actually interested in Northern VA also. The price point I had for purchase was more based off of comps in the south mostly. Up north here it seems as though $650-850k is more common to see. I have come across some decent class C properties in areas that didn't seem to sketchy and had under market rents and value add options. Mostly in Pennsylvania for now. What would a Class B/C 4-plex in N.Va go for?

Thank you very much for your insight.

Adam Scheetz

Good Day Everyone,

I'm Adam, I'm new to Staten Island and the NY market and I am interested in small Multi-family units, foreclosures, and value added properties. Eveything here is ridiculously overpriced and draped in regulations it seems so I've expanded my sights outside of the area.

Locations of interest include; Northern VA, Pennsylvania, Florida, Georgia, NC, and SC.

Plan:

Small/Medium sized multi family properties 4-10 units. 2/1 up to 3/2 if available.

Purchase price under $450,000 with a minimum of $100 cash flow per door after expenses but a target of above $250 per door after expenses.

Cash on cash should be above 10% with 15%+ as target

Properties would be managed by local management company or Live-in manager.

My plan, criteria, and areas of focus change with more knowledge gained. But what hasn't changed is my need to partner with with others more experienced than myself. I'm really in need of experienced analyzers and people good at analyzing whether a deal is beneficial or not. I'm very extroverted and good at talking on the phone to people, talking to and meeting new folks, organizational planning, and research. I look forward to meeting many of you all and hopefully helping in some way.

Thanks,

Adam Scheetz

Good Day Everyone,

I'm Adam, I'm new to Staten Island and the NY market and I am interested in small Multi-family units, foreclosures, and value added properties. Eveything here is ridiculously overpriced and draped in regulations it seems so I've expanded my sights outside of the area.

Locations of interest include; Northern VA, Pennsylvania, Florida, Georgia, NC, and SC.

Plan:

Small/Medium sized multi family properties 4-10 units. 2/1 up to 3/2 if available.

Purchase price under $450,000 with a minimum of $100 cash flow per door after expenses but a target of above $250 per door after expenses.

Cash on cash should be above 10% with 15%+ as target

Properties would be managed by local management company or Live-in manager.

My plan, criteria, and areas of focus change with more knowledge gained. But what hasn't changed is my need to partner with with others more experienced than myself. I'm really in need of experienced analyzers and people good at analyzing whether a deal is beneficial or not. I'm very extroverted and good at talking on the phone to people, talking to and meeting new folks, organizational planning, and research. I look forward to meeting many of you all and hopefully helping in some way.

Thanks,

Adam Scheetz

@Steven McCutcheon thanks so much for the mention. Shoot me an email at InvestorAdamRE at Gmail.com so we can correspond that way. Thank you very much and I look forward to talking to you about the Jersey area!!!

@Basit Siddiqi You're right. I've actually tried Jersey quite a bit, but without any broker connections or MLS access nothing on loopnet seems viable. That being said, I've found some MF units in the Pittsburgh and Philly areas that have sparked my interest. There seems to be more volume further Inland. Once I can get all the numbers I'll post them for other people's input. Thank you for your feedback.

I'm a military member who is new to New York (Staten Island). I'm also unfamiliar to the New England market in general. Everytime I look for Multi-family it either seems over priced or non-existent. What and where should I look for decent Multi-family units from Virginia to PA to NY?

Additionally, I would love to talk to experienced investors in this area and hear your thoughts.

-Much Appreciated,

Adam Scheetz