All Forum Posts by: Chris Bounds

@John Stover

Adding to what @Trenton Parks said, a clearly written business business plan with 1, 3, and 5 year goals should be defined before jumping in. First though, determine your end goal (E-Myth Revisited, highly recommended book). It seems to be cash flow related, but I'd put specifics to it.

With those things being defined and written then you can focus on strategy and production. Putting down 20-25% and using conventional financing is one way to do it, but its the biggest draw on your cash. If it were me, I'd go the creative route. You can do a lot more deals with creative financing than using your hard cash.

There are a lot of articles on creative financing on BP, but one easy way is to find a private or reputable hard money lender. Many will loan 100% of the purchase price up to 70% ARV minus repairs. If you buy your property 70% minus repairs (or cheaper!) then your out of pocket expenses are very minimal. Your cash can stay in the bank as reserves just in case things don't go as planned.

I have 1 full month's rent deposit on all my SF homes. But this apartment, the demographics are not having it. They'd rather pay $525/mo with no deposit than $490/mo with $100 deposit. Strange, but I'll take the increased income to pad the NOI.

I'll give a full recap once the project is finished, but here is a quick status update.

I did end up purchasing it. Self-managing for now until the rehab is finished. Interior rehab is about 60% complete. 3 completed units already leased, although it took a bit longer than I thought to price them right.

Like most big rehab projects, expenses are higher than estimated and it's taking longer than expected. There was plenty of spread for me to make the final call though.

On another note, message me if your interested in purchasing small cash flowing apartment complexes.

I didn't have enough activity with $520 only. I'm now advertising $495 rent w/ $150 deposit or an option of $520 rent with no deposit. I prefer $520, especially since it increases the NOI and thus increases the property's value.

I thought so! That's enough for me - thanks!

I know laws vary, but in general terms is it likely possible for me to offer different rent options to tenants for an apartment complex?

For instance:

Option 1: $100 deposit and $495/mo
Option 2: No deposit and $520/mo

I'd like to advertise the lower rent option, but have the second option for those that do not like putting down deposits. Normally I require deposits, but this area has other apartments that do not require one.

I like that font - thanks.

I am a premium member. MHD is a nice site and good place for wholesale deals (buying or selling). As far as their premium membership refund if you buy a property the first year - I've been waiting on that for two months.

Ryan Logsdon I got the idea from How To Buy and Manage Rental Properties. It's a bit old but there are a lot of great ideas for property management.

Like Joe said tenants generally won't move over a small increase. Moving is a pain. Besides, most will probably expect rent increases.

Also, for good tenants we tie the increase to a small lease renewal perk like a free house / carpet cleaning. It's win/win.