All Forum Posts by: Brent Silberbauer

i figured this out.  PGE will just do a true up at the end of each lease.  Problem solved.  

I'm a local manager from Chico.  We would manage both houses for 9%.  You can find managers out there who will do it for 8%, but then you start getting into discount managers and you will trade off quality service, which in my opinion would be a bad trade off.  Typically in you'll see 9-10% management fees.  Some managers charge for turnovers, other's don't.  You just have to call around.  Additionally, out of state owners are charged an additional tax from California (the land of taxes).  Lastly, the rental market here is very strong.  Vacancy rates have been hovering around 1%, but there are about 1,000 new apartments in the local planning commission pipeline that will cause the vacancy rate to rise.  Just a few other things to consider.  

@David S. I think there have just been a few surprising sales in the past year in the multifamily market.  Stuff that I thought would never sell at 5 cap or lower all of the sudden sells. You just have to do your homework.  Each deal is different. The market is definitely hot, but there are still deals to be had.  I just referred and investor over to a deal that was an non-student mulitfamily with a 8.5+ cap and potential upside so, still stuff out there.  Good timing, good analysis, and networking like you are doing now tend to pay off over time.  My company (Hignell Inc.) does consulting on mulitfamily analysis if you find something you are really interested in. 

@David S. What kind of cap rate are you looking for?  When I run the numbers I'm getting between a 4 and 4.5% cap rate on this property.  I'm not sure how much upside you will be able to gain because the student market is about to get 800 new bedrooms of new development within a mile radius of campus.  Nobody really knows how much it'll affect the local student housing, but it'll obviously soften the market a bit.  

@David B. That's about what I thought.  It's fairly significant.  

So the interest rate deduction goes from 1MM to 750K.  Theoretically, how much a year would this cost someone in California?  How much of a loss will it be to not be able to deduct the interest on 250K?  Is this really that big of a deal to the budgets of people all can qualify to buy a house worth over 1MM?  Can someone help me with the math in dollars per year lost? 

Ok, that makes sense. I am a property manager from Northern California.  It just creates a little more work for us to manage the kwh those tenants use. Also, the way it is billed out is that there is one big bill (or credit) at the end of the year.  No monthly bills, which is crazy.  It's so hard to manage this because there can be more than one resident that used electricity during the year.  It looks like we will have to create some kind of account to bill the resident to save up to pay the end of the year bill when it comes. 

So @Jake Thompson, are you going to advertise that the higher rent is because the electric is included?  In that case what if they run the AC all Summer long carelessly and rack up a large bill that is $300/mo?  How do you handle that when charging a flat fee rent increase for electricity?  

Hi guys, wow thank you so much for the feedback!  @Tanya F., those look like great tools.  Thank you so much for the tip.  @Ceril S. I think monitoring the kw's and just adding more rent into the equation will be the way to go.  We will just have to individually monitor the kw's every month which is a pain, but probably just part of having solar on a rental unit.  The home was purchased by an investor, but was previously owner occupied, hence the solar.  If someone could come up with an app or some kind of monthly billing platform for solar rental units that would be amazing.  The whole yearly billing/credit for energy just is not ideal for investment properties.  

Ok good.  And for future.  What if you have the exact situation with an individually metered home.  Do you count the kw's every month and bill out the extra putting it in an account to pay the bill at the end of the year?  Often times the solar bill comes at the end of the year, while people move and sign leases in the Summer.