All Forum Posts by: Brandon Yuan

It depends on the market and what kind of financing you want so it could go either way. I bought two fourplex together from same seller and it was purchased as two separate properties even though at same time. Each property has its own loan and its own closing. So you'll end up paying twice closing cost and twice loan cost ( not necessarily quantitatively) with conventional residential loan (1 to 4 units) Or you could bundle it up and get a commercial loan to purchase it as a small 8 units multi-family property. You'll need to work with title company and potentially a lawyer to structure the title and deed properly. In my case, buying it as two fourplex is appraised and valued based on comps which is lower than if it's a 8 unit property which is based on NOI and Cap rate. So I didn't say anything when seller is selling both fourplex together but as two separate properties. And that's what I typically see in my local market. So I'm not sure why it's other way around in other markets as others commented. Interesting

congrats on your new deal!

I use Alltec keypad and access control system. It's a bit old school but the price is reasonable. there're better systems out there but you pay for the premium. 

I'd suggest you to make decision on which management software/website and which gate access system together! Not all of them are compatible! you don't want to choose a gate access system and it limits which management software you can use, or vice versus. Plus, some management software even offer their own access control hardware. And that's where I learnt my lesson hard way... I use Easy Self Storage as my management software and Alltec for my gate access system and they're compatible. they talk to each other and automatically lock/unlock tenant access based on their account status in the management software. However, I just found out Easy Self Storage started to sell their own access hardware, and then it released a new feature on their software/website that you can see gate access activities/log live and can even open/close the gate remotely simply through the website (even on your mobile!). I'd love to have that!! but then I'll have to reinvest and replace the gate access system with their new hardware which I probably won't do..... 

@Brad P. I'm local in Houston I have self storage investment too. Be glad to connect

as for your deal, I got a few questions/comments that may help 

• if that's all the cost seller claims, that feels like understatement to me. no one sells self storage facility here at a 10+ CAP here. So I'd guess there may be some other cost seller hasn't shared yet or understated (either that, or you found yourself an amazing deal)
• property tax. seems low but easy to verify. if it's truly that low, you need to consider potential increase post sale as appraisal district probably will end up finding out your sales price and use that as new appraisal value. at $600k and 2.5% (not sure how far north you are, outside city limit?) you are looking at $15k tax
• is there onsite office? and that's additional cost - phone, internet, office supply , etc
• management fee: again is this purely a remote managed facility or onsite office?
• if onsite office, what's the onsite manager cost? (part time?) that's always a challenge for this size of facility
• since this is a 2005 facility, I'd say maintenance/repair cost should stay relatively low. 
• what's the unit size mix? a lot of smaller size units? etc
• any marketing cost? any management software cost? any credit card processing cost? etc

bottom line is, your due diligence on the cost side will be very critical to determine if $600K is a fair price

Good luck!

@Brian Gunning Congrats first! I bought my first ever self storage of 130 units last year so I know how you feel! and nice on the 100% occupancy. could you share a bit stats on the deal? just curious how your deal work. typically when it's at high occupancy it's sold at that premium and not as much upside for buyer to improve and capture that value. But every deal is different and I'm sure there're something attracts you in this deal. Also, what kind of inspections you plan to do? I didn't hire professional inspectors in my deal, but only brought over my regular repair guys to help inspect (structural, roofing, etc)

as for management software, I use easy self storage too and I agree with comments above that it's a good fit for small/medium facility given consideration of their cost vs. value. some others like sitelink and storEdge have quite more cool features but you pay for that premium. another factor for me to go with easy self storage is the competitive rate from merchant account provider they partners with that you use for your website's credit card processing. 

their call center feature is very nice to have additionif you need that. But they charge extra for that. I can't remember exactly how much, but I didn't want to pay for that back then

and @Mark Byrge hmmm they charge me $49/month, and that's after I negotiated down from originally $59/month... sounds like it's time for me to renegotiate that rate now... lol

Thanks @Shea Spinelli! Yep I already went on to Texas PUC site. I'll be doing a bit further research first on the topic, then I may have some follow-up questions and I'd love to get your input. 

Originally posted by @Michael G.:

@Shea Spinelli 

If you PM me, I can send you a sample XL spreadsheet that you can customize that we use to apportion the expenses among the Tenants .. Works equally well for either Gas or Water.

 @Brooklyn R. would you mind also send me your sample XL spreadsheet? I'm considering a multi family deal and one of the upside is to implement water RUBS ..

Also, what's your suggestion on closing schedule for multi family apartment typically? 30 or 40 days feasibility study (is that too short?) after effective date, 60 days for financing contingency after effective date, and another 15 days after loan approval for closing? 

Hi There

I'm currently evaluating a 60 units multi family apt deal in Texas. This is a scaling up project for me.I have a 25 units property so I have some experience purchasing/managing small multi families. Looking at the deal, I have two main initial concern/opportunities I don't have much experience and I'd appreciate any input/advice:

1. seller broker marketed implementing Water RUBS as one of the upside (actually factored into NOI proforma in which asking price is based on). How difficult is it really to implement RUBS? And is it realistic to do so without having significant impact on occupancy (currently very low vacancy). Current rent seems to be a fair market price given the condition of the property
2. the county appraisal value is significantly low compared to asking price (asking price is about 4 times). Would I expect appraisal district to capture the sale price as the new appraisal value (market price) in the following year and hence I ended up with significantly higher property tax? Texas is a non-disclosure state for the sale price, but it appears appraisal district always ended up finding out about the sales price (definitely for residential. not quite sure about commercial ones)

Thanks in advance!