All Forum Posts by: Andrew Michaud

@Ryan Murdock, I won't be sinking 11k into the property. I will be putting next to nothing into the property for a new roof. Already have the windows and siding and paid $0. I am simply asking what others have experienced with results of major improvements and what kind of appreciation they have seen despite the comps.

I am looking into purchasing a 3 unit apartment. The apartment is split into two separate buildings. One building is a duplex and the other is a 1 bedroom house (very small). So from what I have read up on, appraisal value on 1-4 unit properties are based on comps in the area. This property will cash flow which is most important to me, but I am also looking further into other possibilities in the long term for this property! CAP rate is 13%, CoC Return is 80%.

What have you guys experienced with appreciation after rehabs on 1-4 unit multi family properties? This property needs a new roof, new windows, new vinyl siding (currently cedar shake siding). I am a building contractor and actually have 80% of materials to do all of this work already from previous jobs.

To put a new roof on the property it will typically cost $11,000 labor and materials. It will cost me 2 days of labor between me and my guys as I already have the material at no cost saved from other jobs in the past 2 years. How much room for appreciation would a new roof force onto this property? I feel I have a lot of room to totally rehab this property for very cheap and most of the cost will be labor paid to my crew but will it make a significant difference in forced value?

What differences in value have you guys noticed before and after a rehab on 1-4 unit multi family properties?

I am looking at a 3 unit apartment building. All units full, long term tenants. Asking 75k, talked them down to 60k. Tax value is 75k. Income is $200 per door after all expenses including mortgage. Interior the units are in decent shape. Could use some upgrades in places. I would say $1500 per door in interior updates. The exterior on the other hand.. old cedar shake siding looks rough, needs a new roof.. windows and doors are pretty old. I am a building contractor by trade and I would estimate about 15k in materials before my time put into the place to fix it up. 60k + 15k + 1500x3 = 79,500. Lets say I have 80k into this property. Is it still worth it? Numbers all work great as far as income. Locationis great. Just unsure if I am investing too much long term on a 3 unit. This work doesn't have to happen tomorrow, but within thw next couple of years for sure. Up side to this is that I feel that I have a lot of room for forced appreciation and could get all of my money and some back in the future.

@Andrew Johnson, therr is very little to mow on this property. I am going to be doing the mowing, will take 30 minutes of my time. $200/year for plowing is what it amounts to. Also, you think $1000 in repairs is insufficient? What if I accounted for 10% in repairs. $1860 would be a little more conservative. Lets say I am grossing 5k total per year after all expenses in a fairly conservative way. Is that too low?

I am looking into purchasing a 3 unit building in a great location in Northern Maine. I am looking for some opinions on this deal.

3 unit building, all great tenants and fully occupied. 60k purchase price, 79k tax value. 

1 bed $550/mo

1 bed $400/mo

2 bed $600/mo

Total Income before expenses $18,600

Expenses

Heat $850

Water/Sewer $1000

Property Tax $1900

Insurance $750

Trash $500

Lawn/Snow $200

Mortgage $4500

10% vacancy $1860 

Repairs $1000

Total expenses $11,600

18,600-$11,600 = 7000 total profit per year. Which I estimated about $160/mo per door. Do these numbers work? Place does need a little work but not in the short term. Gives me a little room to increase value of property. I am a contractor by trade and will save thousands in repair labor. I feel like this place has a lot of potential in a few different directions. What do you guys think? Thanks!

@John Leavelle do you think its possible for a 30 year loan on this 3 unit property? I always thought that wasn't a possibility unless it was owner occupied. 

I am looking at a 3 unit property. All units are full. How can I get a 30 year mortgage and potentially > than 20% down on this investment property?

@Ryan Murdock two tenants have been there for over a year, one for 6 years. All pay their bill on the due date. As far as condition of property,  its in fair condition and in no need of any major repairs. Would you say 70k is a good price for a 3 unit in this location?

@Thomas S. Thank you for the info. I guess I don't understand what yoy are talking about with equity and paying off the loan creates a liability issue. Also, rents are at their market rates, and tenants do have most of the bill. I am paying heat on one out of 3 units. As far as the 30 year mortgage, I didn't know that was possible on a commercial loan for a 3 unit.

3 unit multi-family. Appraisal value 90k, selling price 70k. 15 year mortgage at 4.5%. Down payment 20% or 14k. Annual mortgage cost $6300.

Rents:

2 bed $600/mo tenant pays electric and heat

1 bed $550/mo tenant pays electric

1 bed efficiency $400/mo tenant pays electric and heat

Annual income $18600

Expenses:

Heat $850

Trash $300

Water/Sewer $1100

Taxes $1900

Insurance $700

Mortgage $6300

Total expenses before repairs/vacancy = $10850

End of year profit would be $7750. Lets take potential vacancy and repairs into consideration.. that would leave me with lets say $5000. Would this be a decent number to make it worthwhile on this property? A big chunk of expenses are coming from my mortgage which I would shoot to pay off the loan asap from other sources of income but disregarding that factor, I am curious if that is a worthwhile number on a 3 unit building. Thanks!