All Forum Posts by: Brad T.

Hi @Tim Gathers, 

  On our bigger complexes 23-63 units, our property manager charges 5% of income plus $15-20 per door per month.  The fixed rate per door is to help pay for the site manager.

@Tim Gathers The company was doing 8%, but then increased to a flat fee of $99 per unit a couple years after I started using them.  Their lease up fee also went from $500 to $750.  Luckily, the rents are about $1,000 per month on these units.  Any lower and I don't think I could handle the new rates.  They do a great job and I don't have many good options where these apartments are located.

You definitely have to analyze a lot of bad deals to find a good one!  It's all a numbers game, so keep reviewing the bad deals and you will eventually find another good one.

Nice work, Josh!!

Hi Eric,

  There are plenty of these properties in the area, they just don't seem to go up for sale that often.  When they do and are priced reasonably, they sell fast.  Most people have the same thoughts as you about Pontiac and Detroit, so that is why you see properties available there.

Brad

Anything in Oakland County will sell fast if it is priced right.  What are your investing criteria?

Quit my JOB

@Matt Foster What are the banks telling you about the HELOC? If you are having trouble with a HELOC, I agree with @Ron Walraven that your return is not high enough if you are at the acquisition phase of your career.

Good question, Matt.  Of course it depends on a few things.

- What are your long term goals in real estate passive or active cash flow?

- How much do you like this rental house, do you want to keep it forever?

- You could also get a HELOC on the property and use the cash for your flips if you want to keep it.

- You should be able to double your cash on cash return by putting a loan on the property and I am sure you make a much higher rate on your flips.

Best of luck!

Brad

Excellent set of posts here.

Cash on cash return will vary greatly depending on what city and type of property you are buying.  50K house vs 1M apartment building, downtown Detroit vs Royal Oak vs Birmingham

Cash on cash is a great way to compare a group of properties to make sure you pick the best one and to make sure that your money is working hard for you like Joe mentioned.

With that said, I like to see at least 12% cash on cash, 25% ROI when you add loan principle paydown, and some sort of value add to increase the cash on cash (below market rents, above market expenses, etc.) This is for 500K+ apartment buildings, but generally the same as I used for houses in nicer areas of metro Detroit.