All Forum Posts by: Alysa Phalen

Hi Chris,

Thank you for your reply, and yes, you are correct that was gross cap rate.  Realistic would be about 6%.  And you are right, it would be a lot of work .  The main strategy would be for me to defer $138,000 in capital gains taxes that I would owe next year from having sold a 9 unit in Fla.  I also think that the location of the property will be a good area for appreciation.  I do think I need to negotiate the price down on the quadplex after the inspection came in with $50k in repairs.  I should get the Appraisal within a week.  

The other areas I was looking at were in DU and Cherry Creek.  

I appreciate your input!

Hi Matt!

Thanks for your fast reply!  My RE Attorney just says it will be a lengthy zoning process but doable to get a variance.  Ironically. zoning already shows 5 units in an email attachment they sent, which includes the garage conversion.  

$22,935.40 in Expenses did not include CapEx, Property Management or Vacancy but included Taxes, Utilities, Insurance, and Repairs. I would be holding property and looking for appreciation on the location of that area, then taking equity out, refi-cashout to buy more property.

The units have been partially renovated as I had a GC with me during the showing of the 1200sqft unit and he said mostly cosmetic updates.  I could also start with one unit to renovate and then do the next when that one is done.  

I identified two other properties that I would need to leverage either 1) $330k or 2) $1 million.  Both are priced at top of market and I am not excited about either.  Both of them have cap rates of 4% but are in very low risk areas and stable market rents.   

Thanks again for your reply!

Hello fellow BP members! I would really appreciate your help analyzing this off-market “quadplex” I am under contract with in the Berkeley neighborhood (3 blocks to Tennyson shops & restaurants) in Denver, CO 80212. It is in a great LOCATION! :)

The property was built in 1910, on a 6154 lot, and is technically a triplex totaling 2641sqft, and has a “non-conforming” detached garage that was converted to a 1br/1ba apartment, with an additional 413sqf as well as an empty oversized one car detached garage.

Currently the unit mix is as follows:

Triplex:

1br/1ba (900sqft): $1000/mo rent

2br/1ba (1200sqft): $1300/mo rent

2b/1ba (650sqft):$1000/mo rent

Detached garage unit:

1br/1ba (413sqft has a tiny attic space as well): $1000/mo rent

I am under contract for $900k, list price was $950k. I was under the 45 day deadline for a 1031 exchange identifying replacement property and found this at the last minute. Total expenses for 2018 were $22,935.40, not including property management. Net profit with rents above were $29,864. Cap rate 3.3%. Definitely need to get that up if I am going to close on this!

I had an Inspection done and hired a GC to go through it line by line and he came up with a total of $50k in repairs needed (of course cheaper if I didn’t use a GC). The units themselves are not updated and the exterior can definitely use some curb appeal.

If I close on this property, I could easily raise the rents on the three units in the triplex by $100 as they are all under market.

I am then trying to think of ways to make additional income and have thought of the following:

• Add a bedroom to the 1br/1ba 900sqft unit, making it a 2br,1ba
• Convert the 2br, 1ba unit to two 1br studios, I know I would need a Zoning Variance for this. This property is zoned U-SU-C1 which allows for Accessory Dwelling Units. I emailed zoning department and received an email back which stated it was zoned for 3 units but included plans showing a total of 5 unit apartment conversions including the garage unit. (It was converted from a commercial building apparently.)
• Add a bedroom to the garage unit, making it a 2b/1ba

I do have an excellent Real Estate Attorney on my team and have some cash available to spend on renovating this property, I am just not sure which strategy is best for me and how to get the best ROI on this property.

Rentometer, Craigslist, have 1BR at $1440 and there are hardly any available in that area, and 2BR at $2000.

After $100k renovations, $1million property with up to 8.52% cap rate,

2br,1ba (900sqft): $1500-1800

2br,1ba (1200sqft): $1800-2000

2br, 1ba (around 1000sqft detached garages):$1800-2000

2b,1ba(650sqft):$1300

=$85,200

I am hoping to get a chunk knocked off the price as it is a cash purchase and it will be appraised as a triplex not a quadplex, and I will also include the 95 page Inspection report with the GC quotes in the Inspection Objection which is due June 3, 2019.

As a final note, I would be completing a 1031 exchange, thus deferring a total of $138k in taxes (thank you to Dave Foster who is my 1031 Exchange Intermediary).  

Thank you in advance for your thoughts, comments and input! I greatly appreciate it, I am a bit in over my head!!  

Good day Matt,

Without a doubt, go with Jeff Copeland.  I own a 9 unit property and he has gone way up and beyond what is required of a property manager.  I cannot recommend him enough.  I did a lot of research in finding a property manager in St Pete (as I live out of state) and believe Copeland Morgan be as good as you can get!  

Good day,

I am seeking referrals for a CFP (preferably in Denver, CO) that also has experience with real estate investing within a portfolio.  It seems that the CFP's I am finding focus on Finance but don't necessarily have that real estate investing experience for them to give advice on planning the overall portfolio including real estate investments.

Any recommendations would be greatly appreciated!

Thank you!

Alysa

Good day,

I am wanting to know if I fire my Property Manager within given time range (30 days per the lease), should I get an attorney to review the letter I send to him?  The lease is very comprehensive and I don't want him to be able to sue me for any reason.  

Any advice greatly appreciated!

Alysa

Good day!

I wasn't sure which category this applied to (1031 exchange, real estate sale, or property manager) but I will start in this category for now.  

I inherited a 9 unit multi-family in Fla in 2009 with no mortgage that I would like to do a 1031 exchange to Denver (I know, Denver is a tough market!) but I live in Denver and I am not making money on the Fla income property due to all the flood, hurricane, wind, commercial insurances, taxes, property manager, etc.  

So I was researching around at different real estate agents to list the property and found one just yesterday, and when I called my Property Manager he was very upset (he has been the property manager for the whole time I have owned it, 9 years) and kept saying "Why don't you give me/my broker" a chance??  and "What about my commission?"  I was very confused for I knew his wife was a real estate agent but never knew he was.  (I know that seems unbelievable!).  And he just signed with a new brokerage firm at the end of last year but I didn't think that changed anything.

My question is, I don't see anywhere in the listing agreement or Management Agreement by the new broker about having to use my property manager to sell my apartments?  After having talked with an extremely smart, aggressive (maybe more assertive) but "definitely on top of things" real estate agent yesterday who emailed me all the different marketing materials she uses (I was really  impressed!) and how she is going to talk to each tenant about their lease and fix things up, etc, I just know from experience with working with my property manager that all he would do is put it on the MLS without any marketing (in fact, that is what he said on the phone) and I know for a fact he cannot offer me what she can .  He probably would be able to offer me reduced commission though, so their is that.

Any advice from anyone who has been through a transaction like this or has an opinion on what is best would be greatly appreciated!  

Feel free to PM me if you prefer.

p.s. I apologize in advance for not being more educated, I am in the process of learning but it helps me so much to get feedback here.  It was hard for me to research this topic as I didn't find any matches or similar situations.

Thank you!

Alysa

Thank you Deanna!  I just received photos of my property and it looks like it's fine (except for a stripped palm tree and debris in the pool).  So I guess you are saying I should have a storm readiness program with my property manager so that in the future he will get my property sufficiently prepared for a hurricane.  I almost feel like changing property manager's, I am just really disappointed with his lack of contact to me...  

Good day,

I live in Colorado but own a 9 unit rental property in St Pete Beach, Florida.   I was very concerned when I heard Hurricane Irma was headed to FLA and called my property manager last Thursday, who told me there was nothing I could do, no one left to hire, no sandbags left.  When I found out the Hurricane was headed directly at St Pete 2 days ago, I posted on Craigslist and found someone with plywood who boarded up the units on the 2nd floor.  I also had people offer to put up sandbags, but it was too late.  I had text my Property Manager when I put the post on Craigslist and then text him again when I hired someone, but have still not heard back from him.

I do not recall the original agreement we had made 9 years ago when I hired him.  But in general, is it a property manager's responsibility to do any type of Hurricane prepping or notification to tenants?  I am feeling really disappointed in him right now.  

I appreciate any replies.  

Alyssa

Found an attorney, I am good to go, thank you for the responses!!  :)