All Forum Posts by: Bill Florence

In my area there are tens of thousands of apartment rental units recently built and under construction with more slated for next year. The trend right now, is for the generation who would normally buy a starter home, is to rent. Demand for rentals has not outrun the supply and rental prices are skyrocketing,  here. But builders will overbuild, and order will be restored with supply outweighing demand, some day. Until then I plan to continue to buy rentals away from the new construction and ride the wave.  When the trend balances out or reverses, I will have plenty of inventory ;)

Great points from those before my post. I have been there and had many septic issues myself. I will expand on one point. If your property has had a bedroom added after the septic or you plan to add one, you better check with local municipality about what they will allow (permit) and check to see what size tank it is, if that tank will accommodate more beds. 

Well in my opinion the deals need to be "real" wholesale deals with at least 30% spread. Majority of get deals in my inbox weekly get deleted because they are retail priced, close to ARV. And I do not even consider someone elses' repair estimates - not sure about others here but I do my own estimating. I prefer to be sent only deals that fit my business criteria. Your asking the right questions, keep it up !

Need an established, licensed PM who can work with out of state investors and who really knows the St. Louis market inside and out.

Welcome ! 

I also have interests in MO so always interested in discussion. Feel free to connect.

Our last commercial project was originally not in current ADA compliance when built (early 80's), and due to the extent of the renovations the county required us to bring the building into compliance, which was lots of $$$$$. Not sure if it applies here but FYI.

One angle to consider is picking the rental based on the highest achievable Debt Coverage Ratio (DCR). Lenders will frequently accept 75% of rental revenue as income, so if your rental has a DCR of 1.25 or higher it will help keep the DTI ratio in balance for future financing. Personally, I want my rentals to have a DCR of around 2.0 to comfortably cash flow and then some.

Yep as the old saying goes you got to "buy it right" whether cash flowing or flipping. 

Never fear submitting an offer that makes sense to you (not a lowball if that is where you have valued the property), worst that can happen is the seller will say "no".

Wow, I wish I could find 50k houses out here that ARV at 230-250k. That is a 20% deal + rehab. If it were me, I would get 3 contractor opinions in writing and/or have the place professionally inspected to get a sense if the real rehab cost, could be a lot higher or possibly lower. Also think about if the block/neighborhood is really as good as the 250k comps - one block in any direction can sometimes make a huge difference. Corner lot, traffic noise, commercial zoning nearby, etc. Also check with local municipality for tax, other liens, eminent domain or redevelopment, ordinance issues, historic preservation, etc. Also check land values, 1.6 ac could be worth more/less ?