All Forum Posts by: Michael Baradell

Hey BP!

IRR is a relative new calculation for me. I understand the basic concept, but am struggling on how to this one up properly.

My deal is a little more complicated, and I’d love some clarity on how to plug this in.

This is an 18 unit complex that is livable, but attracting lower end tenants due to deferred maintenance and condition.

ARV in the current market is around $1.3. This is a seller financed deal at $850kpp, 30 year am, 5% interest rate, 5 year balloon, with an NOI of $80k. Current rents are $800, but after renovations, will be $900. The plan is to renovate units as the come available and increase rents.

Another moving piece of this deal is I am bringing in partners that will contribute around $200k up front, that will include 10% down payment, closing costs, reserves, and remaining will go towards renovating the first few units.

My struggle is projecting the renovations as well as calculating the preferred return for the investors.

I’m sure I’m missing a ton of info needed, but hopefully this can at least get the conversation started.

@Jonathan Bombaci this is where I’m strongly leaning. 

@Caleb Heimsoth For this one, I will be at $148/per door as it sits now. I have not walked each unit yet to know exactly what is needed though, but it appears to be in fairly decent shape. 

This will be an owner financed deal with 10% down, 5% interest rate and a 5 year balloon. 

Current rents are $75 below market rent as is. My goal is to go in and update units to get them up $100, which is current market rent for similar, updated units. Seller is also paying water for tenants, so I will transition that overtime as well. 

@Kristel Daugherty I would typically agree, however, I can’t qualify for a traditional loan at the moment. Would a 1031 apply if I purchased something on terms just as it would if I bought traditionally? I am not entirely familiar.

Hey guys,

I have a property that I purchased in 2010, my first personal property. I sold it on terms about 5 years ago, and the term is coming up in July. The buyer can not refinance, so I will be taking it back over. I am curious on what yall would do. Keep it and sell on terms or rent again, or sell it. 

Here are the numbers: Keep in mind, I purchased this in 2010 with zero downpayment as well as received the $8000 first time home buyers tax credit at the time. I have 8 other properties in my name and can NOT qualify to buy anything new using traditional financing at the moment. This is why I am unsure on what I want to do. 

I currently owe around $120K on it, and am 9 years into the loan. It will sell for around $150K-$155K. I am also an agent so I will save on realtor fees. I have not seen the interior of the house, but I am anticipating having to put $5K into the property to prepare it for sale or turnaround for new tenants. 

Thoughts?

Hey guys!

What is your goal on cash flow for a multi unit building with 10 plus units? Do you have a specific metric that you are trying to hit in regards to cash flow? I recall hearing Brandon Turner say he looks to hit $100 per door net cash flow. What’s your goal?

@Jonathan Bombaci thanks for the response! I will actually manage myself. I am partnering with a long time property manager in my area, and we are expanding the company for me to fully take over in a year or two. For multifamily in my area, that costs is about right. 

I know I will be solid on financing with a 30% down payment, so my goal is to put 10% down now, increase the rents to market value and switch water over to tenants. Both of these helping increase the value along with the debt paydown over the next five years, should allow me to refinance at 30% LTV with only the equity in the deal. (I do have a relationship with a local bank). Also, I do have a couple of partners on standby if need be.

In regards to the insurance, there was a claim made about 15 years ago, but nothing since. He admitted that he has not shopped insurance in years. I think there is a good opportunity there as well!

All things considering, I feel good about this one. Going to give him a call tomorrow and try and lock it up!

@Alan Grobmeier I appreciate the insight. These units are usually gone in less than a week! It's in a great area as well as on the water, so there are few properties that compare. Being an agent in the area over the past few years, I feel confident they will rent fairly easily, however, I may bump up that number a bit for some cushion. 

What are your thoughts on the deal overall? Seem solid? I love the options that it offers in terms of being able to increase rent as well as moving the water bill to the tenants over time. 

Hey guys,

I came across this off market 18 unity apartment complex. Seller has owned for over 25 years and has no lien on the property. The numbers are his actuals from last year. 

This one intrigues me for a few reasons:

1. He is charging $800 in rent where market is easily $1000 (neighboring similar units rent for $1000)

2. He is also paying for water for all 18 units

3. There are 16 separate garages attached to the property that he is not utilizing. 

4. He is willing to seller finance for 5 years at 5% interest 30 year am. with 10% down

This will be my first multi family property, so any insight on what I may be missing or should consider would be greatly appreciated!

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*This link comes directly from our calculators, based on information input by the member who posted.

I am compiling a list of mobile home Parks in my area that I want to analyze and begin to build relationships with the owners.

Can anyone offer advice on how to best approach this? I don’t want to come across as too pushy on my first phone call, and I fully understand it could take some time to nurture these relationships.