All Forum Posts by: Aleksandra Serebrenik

 What is RS? And do these areas still offer interesting opportunities in late 2023? Sunset Park, Ridgedale, Glendale...

Will the current owner be moving out of the unit they're currently occupying? If so, you can run the numbers with the market rent that you'd get upon re-renting. Personally, I do a year-by-year five-year calculation on properties that I consider. That gives me a better idea of what improvements in profitability I can expect in the medium term. 

I also agree with @Evan Polaski that you should keep the capex at least at 10%, and maybe higher, depending on the condition and year of construction. It's always better to err on the side of caution as far as building your reserves goes. 

Concerning property management, I don't recommend just cutting that out from your expenses. Your time is worth something. Plus, you won't necessarily want to be self-managing forever. A way to possibly cut it down it to find out how much actual property managers charge in your market. You may be able to get away with 7-8%, though with just four units, seems unlikely, and that it would be 10%+. I've even heard of property managers not taking on just a single small multifamily because it's just not worth it, or having a minimum per-unit price. I'd suggest doing a year-by-year calculation, and only allowing a lower property management expense for a limited amount of time (ex: first 3 years). Maybe you'll see that in your calculation, with increasing rents, you'll be able to budget the full 10% property management after a few years. 

Hi everyone, great to find this thread! I'm also looking to start investing in the Lexington area. Thanks @Joe Marcum @Joseph Back and @Luke Marsh for the tips on groups to connect with others in REI! Looking forward to connect with you all.

The financing and inspection contingencies. The standard seems to be 7-10 days for the inspection - if you can get 10, go with that. 

With financing, standard is 14 days. I wouldn't put anything less than that when relying on bank financing. I had my offer signed on Wed, and got financing approved on Friday, 9 days later, and that with me being highly proactive, proving all docs, etc. Of course if you have a reliable, investor-friendly broker, it should take just a few days, thanks to @Mathieu Laquerre for pointing out the critical importance of that! But still, best to plan for possible delays.

@Ken Halef very true that's it hard to find something worthwhile on market these days. Talking to other investors, it seems like finding properties off the market is a better way to find a deal. A major challenge for me (and, I understand, for many new investors) is estimating the price of renos needed, which of course makes it difficult to know what's a reasonable price to offer!

It's interesting that you're considering building as a way to get started. I myself would love to get into building/development down the line, when I have more experience! Do you have a background or any experience, or reliable contacts in construction or development? Are you estimating that building will be more profitable with the higher material prices and the added challenges of getting a certain type of financing together with the time constraints to minimize holding costs? 

@Jonathan R McLaughlin You're definitely right that it's better to anticipate the laws getting stricter as we go! 

We ended up taking a sample and doing a test, and just found out - surprisingly, as @Mark H. Porter discovered as well - that there's no asbestos in the vermiculite! Of course, that doesn't say anything about it being used in other areas (floor, wall insulation, piping, etc, nice little visual in this article: https://montrealgazette.com/ne...) . We'll probably go ahead with the purchase, realizing the extra testing and possibly precaution that will be necessary if and when we drill, demo, rip out flooring, etc. 

As others have pointed out, with older houses, it's very likely that there's something in the way of asbestos or lead paint somewhere in there. 

Thanks :-) Hopefully we get to closing! still in the inspection/getting financing phase. It's a quadruplex (only 3 units recognized though) in Saint-Jean-sur-Richelieu, a smaller town about 45 minutes south of Montreal. Three small units (1 bdr/studio) and one larger apartment (3 bdr). Hoping to be laying down floors in three weeks! How about yourself - where are you in the process?

Hi @Mark H. Porter, that's interesting that it has no impact on the value of the property. Just goes to show how local real estate is! It is true that if I do the test and find that it is there, I won't be able to say "Unknown." As far as I understand, I might be required to inform potential buyers, and possibly anyone else who will be in the building (I think I read this on another BP forum. I'm still going through all the legislation surrounding asbestos, and it does change over time! So, though I wouldn't be required to remove it, and it's actually recommended not to disturb it if it can be reliably contained, it might be preferable to remove it if it really becomes a hindrance to getting work done or getting tenants.  

Thanks Rodrigo - that's reassuring! Vermiculite insulation in buildings of those 5-6 decades seems to be a way too common of an issue to be a very major drawback. That being said, as you recommend, we're doing a test. I was also thinking in that area of negotiating room, $5-10K. At the end of the day, it's about how good the deal is - both numbers-wise and how much closer it brings you to the goal. For me, the first deal is largely about learning, so I'm looking for the right mix of potential value adds but nothing too major. The vermiculite was initially alarming, but informing myself helps put it in perspective. 

@Lee Snyder Congrats on your first property! Lots of great tips in the thread. I'm heard many people recommend managing your first few properties yourself, as @Matthew Kontoff recommends, and that's what I'm planning on doing as well. 

Don't know much about Indiana laws, but they're prob trying to protect local businesses. Hopefully this doesn't concern you as an owner.