All Forum Posts by: Anthony Vander Meer

hello all, 

I have an accepted offer on a 8 unit apartment building. I'm paying cash then doing a cash out refi. I am concerned the appraisal will come back low due to past small unit appraisals. What is the average a commercial appraiser discount the yearly rental profit using the income approach. I have the building valued at 850k at a 8 cap with my projected expenses. However I know appraisers many times just discount the yearly rent roll by 40-50% to come up with their NOI. 40% discount would value the building at $733k which would sink my cash out funds. Any help would be appreciated!!!

@Douglas Curtiss

Use it as motivation. The best revenge is massive success! Being negative about someone else’s motivation is usual just envy disguised. Is the nay sayer themselves successful. Most likely not.

@Matt Slease sorry for the late reply. I used Buildium. Although it may be a little over kill. I demoed landlord studio recently and really liked it. Good luck! 

@Joseph Turner

I don’t know much about Cleveland but I’m a firm believer in starting off with multifamily. Considering your out of state you want to make it worth your while. Cash flow is better, your more diversified with rents (ie 2-4 rent payments coming in better then 1) , and you’ll scale quicker. Good luck! Either way find a deal, buy it, learn and do it again.

@Bob Langworthy

Depending on how many units you have I would spend a few dollars a month and get one of the many PM softwares available. On the highest end you’ll pay $35 a month and it will take care of reporting, bill pay, year end taxes etc. Many are free of charge as well if you don’t mind the 2-3 day deposit hold over.

@Michelle Tucker

Maybe it’s a locational thing but I’ve never heard of charging for water and sewer. If it’s like my area it’s a few hundred dollars a quarter. I would add it as an expense to your P&L then raise the rent to accommodate the amount.

Totally agree with Eric, cash for keys in this situation is unwarranted. I like to upgrade the landscaping. Shrubs, flower and mulch are cheap enough and a single day job for a landscaper.  Shows tenants you care and makes them proud to live there.  NY is 3 months notice for an increase which is what I give. Raise it to just below market rent and you have a good chance of everyone staying. Good luck!  

The Cyber Truck is only 40K, man I thought it was 70K to start.  You got me thinking, gas is getting expensive :).   You know I used to worry about this as well and always made sure to take my truck over my nicer car. Then I realized no one cares.  Tenants/people are worried about themselves not what your driving.  No one is not going to pay you rent because of what you drive. So pull up in that cyber truck and enjoy it.  

Sorry for the late reply John.  DM me your email and I'll send you the letter.  

@Patrick Sheridan

This looks like a solid deal. The roof looks a little old so I would factor in 10k in 5-8 years. I actually really like electric baseboard. It never give issues. Sure it can be a turn off to some tenants but I think not enough to warranty the additional $ of a split. Then again it’s dependent on the area. Baseboard is the heating of choice for midlevel rentals in my area so I have no issues renting. I would ask around and check out rental ads to get a better idea. Don’t over rehab. Good luck but either way I don’t think you go wrong with this deal.