All Forum Posts by: Brent M.

Seems pretty costly for a 5 unit, but dirt cheap for 50 units. What's cost per sqft to build in your market? Is this a high end property with top level finishes, or not so much? Your question is too vague as written.

90% chance that the guy has warrants. Based in your online query, they're likely for fraud. The cops might appreciate a call, but without a vehicle, plate or a concrete destination he's heading to, there's little that can come of it. Great job with the screening though! It has saved me a few times too!

@Gino Barbaro I suspect the above was for me.  I put parentheses around "for BP anyway" because my impression of BP is mostly a collection of newbies and wholesalers who often don't know what they are talking about or are trying to sell me a turnkey for a referral fee.  There are plenty of exceptions though and he is one of them.  Learning to filter the chaff is a required skill around here.  Sorry that wasn't evident in my comment.

Edit- I'm trying to move into the commercial multifamily arena and have been visiting your site.  Pretty legit thus far.  Thanks!

Just saved his rundown to a word document.  Bob's consistently awesome and contrarian (for BP anyway) comments have really changed the way I approach purchasing property and prevented me from buying junkers in the rust belt.  Thanks @Account Closed

Hi Christy.  I was introduced to Jacksonville through RWN and then JWB properties.  I decided that turnkey SFHs weren't my thing, but am still actively searching for commercial multifamily.  Jax Investments and JWB both buy in C neighborhoods.  They get them for 45K, put 25K into them and sell them to you for 105K.  I checked both out pretty thoroughly.  You get an "easy" investment that's not horrible, but I think the average person can do much better with a little legwork.  Remember with real estate, you make your money when you buy and location is critical.  32210 and 32211 are reasonably safe, but both have some rough spots.

@Ryan Goldfarb  Yes, all utilities are paid by tenants.  Taxes will be reassesed, but it's Florida, not too bad of a hit and I budgeted for them.  I'm going to dig hard for defered maintenance during inspections, but a 3rd party tells me they know the property and it's well maintained.  I'll be checking for late payers as well, but the advantage of a good area is a better class of tenant.  I speak from experience on that one!  This market was hammered during the recession, I think all of Florida was though.  

Appreciate the points!  Part of me does just want to stack cash till the next recession.....

Still waiting on the seller to decide between my offer and a lower, cash offer with a 15 day close.  I'm encouraged that lenders at Ameris and Center State has expressed interest in financing the deal after seeing the numbers though.  That builds a bit of confidence for my first foray into commercial multifamily.

@Eugene Kemp Thanks for the offer!  I'm talking with a banker at Ameris who is familiar with the property and says he'd love to finance it.  I've got an offer in with the seller and currently only talking about the option for a 30 day extension to escrow.  I'm taking it as a good sign regarding my offered price.  If the offer is accepted, I'd love for either you, Lisa or both to drive by and tell me what you think.  I don't believe I'm going to have too many initial repairs, but contact info for any local contractors you recommend would be a help.

Gross rents look good until you factor in those high expenses. I might be inclined to make this purchase were it in an area that I expected growth/appreciation, but without that I think the return is too skinny. If you feel that you can add value with rent increases or cutting expenses, that's a different story and may change the dynamic. Perhaps that 10,000 sqft basement presents an opportunity. Brick, flat roof and snow removal makes me think the property may be over 50 years old (just a guess). Do you think 7% for repairs and maintenance is sufficient? What about CapEx? How does this building compare to the last few similar sales in the area? Will the taxes be reassessed at your new purchase price?

To quote the great James Pierpont Morgan when asked what the market would do, "It will fluctuate."  Prices will drop and prices will rise.  When?  How much?  Anyone who tells you that they know exactly is selling something.  I lost mid six figures in equity during the last downturn, and have houses that still haven't recovered.  BUT I learned from that and now buy places that I can sustain through just about any economic cycle.  Is the economy sick?  Yes, we're drowning in debt.  It will eventually resolve itself.  Next year?  In 20?  I don't know.

If you're buying a residence in the Bay Area you plan to hold long term, you'll likely be ok.  Ask me about Vegas :-)