All Forum Posts by: Marcel Theisen

Hi @Destin Challenger, 

I just noticed you haven't gotten any replies. 

Apart from the BP forums, I highly recommend going to some face-face investor meetups /investment groups. 

Check out this post, also google to find other investment groups in your area. 

Birmingham, Alabama Real Estate Investors Meetup Group

Hi Dan, 

Welcome to BP. 

I grew up near St. Cloud (St. Joe). I moved away over 20 yrs ago and now live overseas but I have always thought that that owning a multi-family near SCSU would have potential- although not sure if the numbers would work in today's market. 

Could be an area to look into. 

If you are thinking of owner-occupying a duplex you might want to check out some of the 'house-hacking articles. This one might be useful: 

House Hacking 101

This podcast might also interest you about a guy in Duluth that has done a ton: 

BP Podcast 086

@Joseph Conrey

I was very happily surprised to see Rota Spain and Colorado in the same post!

I live in Sevilla and go the beach sometimes just down the coast from Rota (Chipiona).  I used to live in Denver before moving to Spain and last year bought a 4-Plex in Colorado Springs.  

Great post about breaking free from the 9-5, I worked in restaurants all of teenage years and 20s and really don't want to go back to that so I hear where you are coming from.  

BP is a great place to learn about real estate and meet like-minded people. If you are ever up in Sevilla let me know, would love to get together and chat. 

-Marcel 

You mentioned no Duplex comps, but do you find any Triplexes or 4-plexes nearby? If so, I would work out the price /unit on those rather than compare to a 4 BR SFR.

Hi Matt, 

For my 4-Plex in Colorado Springs, I used John Ciambello at C&S Home Inspections. 

They gave a very detailed report with lots of photos and diagrams and even external links to websites explaining the electrical problems, etc.   It was very useful, I was able to negotiation several repairs that the seller agreed to fix prior to closing. 

@Jean-francois Ndomb

I'm in a totally different market where I can't get anything livable for under $50K/door (in a neighborhood I wouldn't really want to live in) so the idea of getting a 4-plex for $15K/door at $500 rent with only 3.5% down is very tempting. If I knew the local market and were confident I could raise rents and by living there I could reduce those expenses then I would be interested. If all those are true then a buying at 60K it looks attractive to me, especially if you carry out those assumptions over a few years the numbers look better.

I would want a detailed inspection and quotes to know accurate rehab budget. New roof and other major repairs would be my main concern.

Just my 2 cents, hopefully you get other comments below to contrast...

@Jean-francois Ndomb

If you are occupying one of the units, you'll only be collecting rent on the 3 units so I wouldn't count the 4th unit as income (I understand you might only live there for 1 year but I would look at both scenarios so see how much out of pocket it will cost you to live there occupying one unit).

Re-positioning the property by making improvements and raising rents is a great strategy but personally I would just use current rents rather than assuming you'll get $500 to analyze the deal. $500 might be fair market rent but could take some time to get repairs done and raise them (if occupied, when do current leases expire?). 

Asking price is just what they are asking, you'll need to come up with the price that makes sense for you and don't go above it.  Has the seller stated that they will only sell "as-is". If not, I would counter offer a lower price and objections on every one of the problems identified in the inspection and see how much they are willing to repair and/or reduce price to adjust for current condition. 

Hi, I bought in Colorado but live in Spain so had to do everything remotely. I used a lender based on a local recommendation but they were a broker for a major national mortgage company (Guaranteed Rate), so not a small local shop. Being overseas, the important thing was that they were very organized and had a very user-friendly way of uploading and signing e-docs. I did almost everything over email and their web app, only just one brief phone call to clarify a few details. With a local shop, my main concern would be if they are up with current technology to facilitate doing it online or if they need a lot of paperwork signed in person, etc.

@Jean-francois Ndomb

You have budgeted 5% for repairs. If it were a turn-key property that might be realistic but you have already identified some deferred maintenance (AC, basement, etc) so I would use at least 10% for repairs. On your spreadsheet you no not have any line for CapEx, you will need to budget for new roof and other major repairs. This article gives a good overview of CapEx.

How to Estimate Future CapEx Expenses on a Rental Property

Based on the numbers you posted, I don't see a deal there since expenses are too high. 

@Sean Tracey 

Re: determining expenses 

Here are a couple of good articles that might help: 

How to Accurately Estimate Expenses on a Rental Property in 3 Easy Steps

Rental Property Numbers so Easy You Can Calculate Them on a Napkin

Some of the things I did before closing the deal: 

• Got past utility bills from owner to determine monthly average over past year. 
• Asked owner for copy of insurance policy and based on existing policy asked for quotes from 3 other insurance companies to see if they could beat that rate. 
• Confirmed property taxes 
• Checked cost of trash removal
• Researched property managers and their fees to come up with accurate estimate. 
• Asked owner for receipts for all repairs done over past year and also got quotes for any of the inspection objections that the owner did not agree to do (since these would come out of my pocket). 

Hope that helps a little.