All Forum Posts by: Andy V.

@James Da Vault and @Austin Youmans

@Austin YoumansThanks to both of you for your responses. The idea of getting seller financing on this property is what originally caught my attention. However, if the current owner is already losing $60+ per month, he's not going to sell it for a lower monthly payment than his current out of pocket expenses. I know that when trying to calculate the value, potential/future additions don't count towards the ARV. On top of that, the pro forma financials had ignored vacancy rates and only had $2,500/year budgeted for maintenance. When I add vacancy and a maintenance budget in, the NOI drops to about half of the pro forma NOI...which equates to an ARV of about $165k less than what it's listed for based on the stated cap rate.

Any way I look at it, this "deal" loses money.  Thanks again for your input.

@Account Closed Welcome to BP...it's a great place to learn & network.  Good luck in your wholesaling endeavors.

I was recently looking at a property that had retail on the first floor and 9 apartments on the second floor. There is a vacant basement that could be rented for storage & a 3rd story that can be built out for additional apartments. I contacted the listing broker and they sent me rent roll and operating expenses. At first, things looked pretty good...$50k+ annual NOI & an 8% cap rate which would only get better by building an additional 6 apartments. There was no vacancy with long term tenants in place, but most of them were on month-to-month leases. Then I realized that the NOI assumed 0 vacancy...strike 1. By adding the possibility of vacancy, cap rate dropped below 7%. Then, I saw a note that showed the current owner's loan payment amount & realized that even using his numbers, it has a negative cash flow.

The property was being listed with seller financing, which was a great find.  However, I still wanted to check to see if the listed price was about right, or way out of the ball park.  Problem is, it's kind of rural and there aren't many other properties in the area to compare to, so what is the best way to find the actual value of the property?  With a little bit of up front investment, this property still has the potential to make good money, but I would like to know that the asking price makes sense.  Any suggestions would be greatly appreciated.

@Adam Welsh Welcome to BP!  It's a great place to learn & network.  

@Mark Ainley Do your lists also include the far south-west suburbs?  I'm in the Plainfield area and would be interested to see what's out there.

@Ally H. I would agree that removing the existing bushes would help the curb appeal.  Perhaps you could replace them with some shorter bushes so that you retain the decorative "privacy" wall between the yard and the street while still making the house visible.  I also the walkway idea that @Meghan Reed proposed to decorate the yard and draw potential tenants to the house.  One other thought that I had (and I'm not sure if it makes sense for you financially or for your market) was to change the color on the exterior of the house.  Find a color that draws people in and really catches their eye against the lush hill side behind the home.  Good luck!

@Peter Schweers Welcome to BP!  It's a great community of investors.  There is a ton of information and even more people willing to give you advice when you run into questions.

@Kaitlyn Corsiglia Welcome to BP!  I congratulate you on having such well defined goals at this stage in your life.  BP has a wealth of knowledge to guide you in reaching those goals.

@Vicky S. Welcome to BP!  I'm just south of you on the Plainfield/Joliet border.  It's always nice to meet another local investor.

@Jeffrey Turner Welcome to BP and congrats on having already taken the first step into investing!