All Forum Posts by: Brandon Turner

I often do what Mark Yuschak does. I always keep an eye out for cheap/free washers and dryers and then offer to sell them to tenants when they move in. I've made a few hundred bucks this way, it gets the tenant their own washer/dryer, and I don't have to worry about maintenance.

I do always provide the fridge on my rentals, but they are pretty low income housing, so people wouldn't have their own.

Thanks Jon. So it sounds like it can be done. I guess I now just need to figure out how. Is this generally a city question or a county question? Probably both huh?

Also, currently, the units are on 2 separate parcels. So if I can get the units in tip-top shape, I may be able to sell off half the units and maybe pay off the original loan. Owning 12 units free and clear would definitely not be a bad thing.

Anymore thoughts anyone?

oh, also. Once you have that business card in use for a time it is so much easier to get larger lines of credit with the same bank. Good luck.

Try USBank if you have one near. I have two business C.C. from there and my wife has one. We have decent credit (right around 700) and was approved for around 5500 on each card. Both were new businesses, sole proprietorships, and had no problem at all getting those cards. You still need to get a UBI from the IRS, but that is instant, online, and free.

The best part, those don't report to your personal credit report unless in default. So if you rack up some (responsible) debt from your business (I use mine for repairs on the rehabs I am doing) your own personal credit score won't be affected.

Good luck

Hi Ya'll. I will very soon be closing on a 24 unit apartment complex in my town. I will be using Seller financing and like the deal a lot.

My realtor mentioned an idea to me and I thought I would bring it up on here, to see if anyone had any thoughts.

The apartment is actually 6 four-plexes surrounding a central parking lot. Ideally, I would like to separate these six 4-plexes into 6 individual quads, thus making the sale of them significantly easier and increasing the overall profit substantially. However, because the 6 units surround a parking lot, i don't believe I can separate them into separate parcels. So instead, my realtor suggested doing a "condo conversion" - BUT rather than converting the individual units into condos (which would probably never sell to homeowners in that neighborhood or town) I would use the same technique to turn each "4-plex" into its own "condo" to be separately sold to investors looking for a good investment. Make sense? There would need to be a HOA set up, who would manage the parking lot, property management, etc. In theory it seems like a great, complicated idea.

Has anyone heard of doing this? As I figure it, each 4-plex running at max efficiency should be worth $250,000. Thats $1,500,000 total in value. I am purchasing the property for $580,000. So the potential is HUGE if I can make it work. Any ideas? Anyone done something like this?

Thanks everyone.

Hi, I own a house which is situated at the bottom of a large hill. The house itself is fine, but the garage sits back further than the house so that the back of the garage is only about 5 feet from the bottom of the hill. This 5 feet of space is consistently mud, and it gets so wet that in the winter (rainy season) water runs through my garage quite severely (there is a constant stream through it).

I know very little about drainage. How should I fix this? Due to the neighbors garage being 6 inches from my garage on one side, and my house on the other, I cannot just dig a ditch for the water to run.

Would digging down a few feet, then filling the area in with gravel help? Or installing a sump pump? and how would I do that?

Any ideas or suggestions would be great. My tenants would love to use their garage floor again :)

Hi there, I have been dealing the past few days with a similar situation. I have a house that I am selling which has the post and pier foundation, surrounded by skirting. We have a good offer on the home, but the buyer wants the skirting replaced (we think it is asbestos).

Our City code allows for pressure treated plywood to be used, and it can be run right into the dirt. However, the buyer is using FHA backed financing, and FHA does not allow the pressure treated wood to touch ground (even though it is rated for such) but instead I have to dig a 4 in ditch around the foundation and fill it in with gravel. FHA is okay with the pressure treated wood to touch gravel, but not ground.

So thats what I am doing. I framed the piers with treated 2x4's and then ran the treated plywood around. It hopefully should satisfy both the City and FHA. But as John said, check with your city. Some areas will allow Hardi board (the 4x8 sheets) for skirting (FHA said they would allow this) but since Hardi is not approved for ground contact, my city does not. But maybe your city will.

Good luck!

Hey guys, Thanks for the input.

Uwe - I figured value by taking $70,000 NOI and then dividing by .085, which comes out to 823k; I'm pretty sure that's about right.

Vikram -I kinda feel the same way. This seller would never consider selling for what it actually is worth, because he would rather just do the work himself and sell it for much higher. I just wanted to make sure I wasn't crazy in thinking it might be okay to pay more because of this.

Eddie - I've struggled with this a bit too, but I have 5 units rented right now (mix of duplex and sfh) and it doesn't feel like much of a problem. I work for myself doing handyman work, so I've got a flexible schedule. I also think i'll move in and call myself the "live in maintenance guy" while I'm fixing it up which means I can handle landlording much more hands on but can always defer questions to "I'll talk to the owner". And it could be an adventure. If I decide to proceed, I'll definitely be needing lots of support from bigger pockets. I'll live on these forums :)

Thanks! Anything more I'd love to hear!

Hey Everyone. My first major deal has come across my plate and although I've read every book under the sun about buying apartments, it is still a big step. I thought if anyone is up for the challenge, they can let me know if this is a good deal or not.

The apartment is 24 units. A friend of mine bought them new 22 years ago, owned them for around 15 years, paid them off, then sold them will seller financing 7 years ago. He is now foreclosing and will take back these apartments in 3 weeks. We have been discussing this for some time, and now I need to decide. He has offered to sell them to me for 580,000, if I can come in with only 25,000 to pay the back-taxes. This is his retirement, and he wants someone he trusts to buy it. The following is the info we have:

24 units (6 4-plexes surrounding a parking lot); average rent 475 per month = gross rent 11400/month, $136,800 per year.

only 17 units are rented (actual rent: 8075/month, $96,900 per year) . the others cannot be yet, due to their condition. The owner stopped caring for the properties 1 year ago, so when tenants moved out, the units were never prepared for new tenants. The exterior needs paint and some small siding repair (which I can do myself) and the parking lot could use some patch work. One unit is gutted to the studs, but the rest just need carpet,paint, etc. If I got this apartment, I would move in for the first year and spend my time fixing the units up one at a time, getting them rented as I go – hoping to have the whole complex online and running smoothly within one year's time. I expect the cost of materials to fix this place up to be around $30,000. So I will need around $55,000 total invested. I plan on borrowing this from either my parents or a partner (if I can find one).

Using 50% rule, expenses (not counting the cost of getting the vacant units rented) will probably end up running around 5500 per month, or 66000 annually. I did a more detailed analysis of expenses, and came up with about the same amount when I include 8% monthly maintenance, 10% property maintenance, and eventual 8% vacancy rate.

So possible NOI could be about 70,000 - so with a 8.5% cap rate (my guess at average in the area for a nice complex) the value could be $833,000 . However, AS IS, with an 8.5% cap and NOI of 30900 the value would be 364,000.

So I know that "they" say never pay for an apartment based on what it "could be" but rather what it is right now. However, my friend who is selling it to me has offered the following option for the 555,000 mortgage payment: first year $2000 per month, second year $3000 per month, and third year and beyond, 7.75% APR which equals out to about $4000 per month. This way, hopefully some of the repair money can be made from the cashflow the first 2 years.

Also to complicate things, the apartments that are renting for 475 would be able to be raised without much trouble to 525. Rents have not been raised in years and 525 is very much market rent - if the complex had the needed repairs and management in place.

So the big question is: Is it worth paying more than its worth because of the relative easy financing, low down payment, and having a step up mortgage for the first few years?

So, that's the situation. From almost every angle, I like it. But maybe someone else has different perspective. I feel like with only needing $55,000 total invested (none of which is my own money), I can own this apartment which cashflows at every step (according to my calculations). Let me know if I left out any vital information!

Hi, does anyone have an estimate for the cost of basic insurance on a 24 unit apartment complex - worth around $600,000-700,000 built in mid 1980's, concrete foundation decent condition (B-C Grade)?

I know this number will vary greatly depending on a lot of factors, but I'm just looking for an average and ballpark. Thanks!