All Forum Posts by: Amit G.

Thanks @Toby D. I am familiar with HOA as it is my neighborhood. They are allowing renters as of now. I plan to buy and hold.

Thanks @Austin Fruechting those are some great suggestions! 

Thanks @Lee S. sent you a PM.

Thanks @Lance Wakefield. I do plan to do that. And as I mentioned in my post I have an upper limit.

Hello fellow BP'ers,

I have an opportunity to speak with a homeowner in my neighborhood, who is likely to sell her property very soon. The good thing is that the property isn't listed, and from what I know this person has already bought a new house and is planning to move out soon. I am meeting with her in a few days.

Our community (a condo community) is in high demand and generally speaking average days on market is around 30 days if priced right. Most of the houses are in 220k range and sell fast, but this one is expected to be higher priced one, around 250k. On an average holding period for this is expected to be 2 months at the least.

I am looking to get some pointers on how I should approach her! I crunched the numbers and I think the max I could offer would be 200k. 

Of course until I meet with her I won't know whether she owns free and clear and if she is motivated or not. I just want to prepare in case it turns out that she is motivated. A few things I can put forward as benefits to her are -

- saving her 6% realtor fee (I need to figure out how to do this :) but I have access to a very good attorney expert in real estate transactions)
- she doesn't have to pay any closing costs (around 5%, I calculated my numbers including this)
- she will avoid holding costs (~ 1500 per month at the least)
- No hassle of showings
- avoid holding for uncertain amount of time
- buying as-is (I know property is in best shape)

I am not sure I can do cash transaction for this, otherwise that could have really made a difference. 

Can you think of some other talking points that could increase my chances? Of course, all of this doesn't work if she isn't motivated :)

Thank you @John Leavelle.  I can include all those expenses which I am but wasn't sure whether I can include those to justify the offer amount. It looks like I should be able to. 

Thanks @Wade Sikkink . I kept hearing about 50% rule of thumb but wasn't sure it was reliable.  Glad to hear it works for you.   

@Jeff Sprunger as I mentioned those were the only expenses disclosed by seller, and that includes electricity for common areas.  All taxes were accounted for and I have the actual copy of latest bills.

I haven't done any multifamily deals before so am really looking for some guidance here!

Thanks @Andrew M.. I am not sure how it plays to put an expense to justify an offer, when I see the seller may not consider something like property management as a valid expense while calculating NOI.

I will add vacancy expense. 

Good morning BP'ers

I was trying to analyze a 4 unit multi family property off the MLS listed at $199000 with only 4 category of expenses provided by seller - insurance, water/sewer/trash, electric and taxes. I do have the actuals for these too and they match what they provided. Some of the expenses I know that I should consider are Capital expenses@10% as the last roof replacement is unknown (property built in 1980s), Repair expenses@ 5%. Seller did many improvements over last 5 year, Lawn care/ snow removal expenses, around 3%.

So my question is, what all other common expenses am I missing to come up with a realistic NOI compared to what seller provided ($13000)?