All Forum Posts by: Austin Johnson

I would call your County Assessor's Office tomorrow. Ask to speak with Residential Real Estate department and discuss your situation. I'm in the Commercial department.  I know in my office there's the Board of Equalization (BOE) made up of a variety of individuals in Real Estate to provide outsider opinion on a case by case basis. Give them a call, they SHOULDN'T bite your head off. At least that's how we handle things here in Missouri.
Add on: has anyone from the Assessor's office walked inside your property? if not, perhaps invite them out. if your projected value is WAY off of their value, you can 'show all your cards' and exchange notes. I know it goes off assumptions in some situations as far as "well the outsides look the same and this property was this much" that's not always right but sometimes its the best an assessor's office can do.

Sadly, everything Bruce said is correct. I did want to ask. you mentioned twice that "one unit was successful" do they happen to be the same unit? I'm sure you've already thought this but can you rent out one unit, save the cashflow to repair the second unit. 
In order to make a decision on keep vs sell it comes down to holding costs, repair costs, total all in costs and projected ARV and rents. If you're losing $1k/ month by holding it, it costs $2k in repairs and will take 3 months to fix. is $5k an amount you can easily get on cashflow or equity added? I'm making up numbers because I dont know them, it would certainly help form opinions though.

I have no connections in that area, but what Sqft are they looking, bed/bath and style of home preference? heck, maybe add price range as well. This may help disqualify some deals.

Check Airbnb and compare your potential STR to the listed rentals and get an idea of your location and price point.

Man, those are great comments! with factoring in insurance and taxes, is that covered by the 50% rule then? 
I have not visited the property and I assigned class C to it based on well to be honest with myself guessing based on the area and looks. 
Overall what I'm understanding is I need to factor in taxes and insurance into my prices, physically view the property to verify my Maint,Capex assumptions and make a phone call and collect actual rent rolls and T12. is that all correct?
I appreciate the comments gentlemen, it truly helps me learn this!

I'm practicing my underwriting on various local apartment complexes and found an interesting case that I wanted feedback on. Perhaps my method of running the numbers is wrong, I'm forgetting something or the local market is missing a massive deal. Either way, I'm sure I'll learn something and hopefully others will too!
The building: asking on MLS is $400k 1980 build, 8 units, all 2 bed 1 bath Class C. 62 days on the market.
I used verified rents from 2008 as well as current listed rents for the building to figure a conservative monthly rent to be at $4750.
$57k gross annual return. take off 30% (8% vacancy, 12% PM, 5% Cap Ex, 5% Maint.) 
We're looking at $39.9k return a year.
If someone paid all cash at asking price, it would be 39,900 / 400,000 which comes out to a 9.9% return?
If you got a mortgage and put 30% down, ($120k) you're looking at est. $20,796 in mortgage per year. Take that off the 39.9k and you have a return of $19,104/year. If you divide that by the initial investment of $120k, that comes out to a 15% return?
So, what am I missing here? I know I'm assuming a turnkey property with no value add potential. Why won't this property sell though? any feedback would be greatly appreciated. 

Edit: I'm not an agent nor related in any way to the seller. I'm observing the local market and trying to learn.

After literal years of studying, I pulled the trigger and bought my first house. a live in BRRRR. I also leveraged my years of studying REI through BP and interviewed for a local government commercial appraiser position. AND. I. GOT. IT.
Now I'm studying Apartment syndication (as well as appraising obviously!) and all the avenues to expand outside of SFH.
BP has been instrumental in my purchase as well as my new career!

maybe not the place, but why Columbia,MO? I live 30 minutes away and commute to work here. just curious what your perspective is on this location. (I'm currently looking at deals outside of Columbia) 

I would be interested in joining! Any updates on this? 

Situation: A partner and myself are closing on our first house hack/duplex. we're planning to house hack one side, the other side is currently being rented at $650/month. (We've been best friends since 2009) On that same street there are several duplexes with the same floor plan and rental income. 2 bed, 2 bath. Columbia, Missouri.
Currently there is brown carpet in the living room which you step on immediately when you enter through the front door. linoleum that needs replaced in the kitchen and both bathrooms. carpet in the two bedrooms.
Our plan is to upgrade the duplex in hopes to increase rental income up to $700/month. Our upgrades include the sink vanities in both bathrooms, upgrade the master bathroom's shower, build a privacy fence in the back yard (very rare find in the local market and no fences at all on this street),paint and refurbish the cabinets, paint the floor trim and replace the flooring. in both units of course. This is where we are caught up and have difference of opinion.
Option A: run LVP through the entire duplex. living room, kitchen, bathrooms and bedrooms.
Option B: run LVP through everything and tile the bathrooms/ laundry room.
Option C: LVP in the kitchen and bedrooms, carpet the living room and tile the bathrooms.
Locally there are several large apartment complexes complete with golf courses, gyms,etc. All of those units have carpet in the living room and bedrooms with either linoleum or tile in the kitchen/bathrooms.
So, do we do what the local apartment complexes are doing and go carpet/tile or do we do LVP in an attempt to ask more in rent (with the other upgrades).
Additional info: the duplex is located just outside city limits on a road the ends in a cul-de-sac
We would very much appreciate any input into this situation as we are both first time investors! Thank you