All Forum Posts by: Charles Soper

So if your numbers are right then it looks like expenses are just under 50%, which is good.  After debt service you come out in the black, also good.  Make sure you are comparing your projections against actual numbers and not just what the seller is telling you - get copies of utility and tax bills, make sure you are accounting for the new tax bill increase after the sale, and get tenant eStoppel agreements so you can verify the rents/leases/etc.

The flat roof would be my biggest concern as well, but were is the property?  The desert where it rains rarely or the Northwest where it rains daily?

As for the expenses what can you do to reduce/remove the tenants reliance on you paying the utilities?  Are there separate electric or water meters?  Why do you need to be paying phone and cable?  If you reduce these (make them your tenants responsibilities) and don't change the rents immediately how does your occupancy change?

Best of luck to you...

This thread could get pretty exhaustive depending on who you ask.  I would do your best to work from actual numbers when doing your calculations.  So that means look to your realtor or the seller to provide actual rents, utility statements, property expenses, tax bills, etc.  Be cautious here and request bank statements to prove rental income amounts and compare again estoppel agreements you get from the existing tenants.  Ask for utility bills, 12 months is good so you have an average for the whole year.  You can look up taxes with the county the property is in.  Don't forget to calculate the new taxes based on your purchase price, not what the seller is paying now.  Get a quote for insurance and any contract services like landscaping that you'll be responsible for.  The BP calculators are a great place to start so you don't leave things out.

Having just finished with a major rehab on a duplex built in 1954 I’d be very cautious.  Building codes and materials have come a long way and if you dont account for the expense up front it may be really painful post purchase.

Personally I had to completely replace plumbing including the sewer drain pipes under the foundation because they were cast iron (pay me now or pay me later situation) and electrical because of code.  Both together cost $25k of which I only budgeted $15k, ouch!

Good luck to you...

Comes down to your goals.  Are you buying with the intention of holding “forever” or a short time?  Most people I know who buy turn-key buy for long term cash flow and appreciation is a bonus.

Everybody above make good points but anything multi-family (Duplex - 100+ unit apartments) are valued differently than SFH. You need to answer the question about keeping it a duplex or changing it back to a SFH. If a duplex a good rule of thumb I follow from J Scott is the value of 2-4 unit properties is roughly no more than the total gross rents x 100. So in this case at their ask of $180,000 you would need to rent both units for a total of $1800 per month or $850 a unit. All that said, the local market dictates so take into account demand for investment properties, flood insurance, local economy, etc. Nice looking property by the way, not sure how much "house hack" you'll get out of that one.

I think tolerance is your key word there.  Not sure what kind of investors you are looking for but lets assume they are accredited investors, which generally means they've had some decent successes in life and didn't get there by staring at an eye chart.  Stick with the K.I.S.S. principle when doing a presentation and only dive into details like this slide upon request.  Make it pretty but know your numbers so when they do ask you can provide.

Just got done listening to a podcast by Whitney Sewell and he was interviewing the dude who wrote this:

https://www.amazon.com/Diligence-Handbook-Commerci...

Good place to start anyway...hope that helps

Lots of places to start but likely you’ll need the education piece in place first.  Try these guys out to start:

Rod Khleif, rodkhleif.com

Michael Blank, themichaelblank.com

Joe Fairless, joe Fairless.com

Hope that helps

I might suggest you start by offering him his price first with seller financing and see what he comes back with.  No point in giving up more than you need to.  Additionally remind him he’ll only pay taxes on the loan payments instead of capital gains on a sale.

Something like 99 ways to leave your lover...the list is only limited by your creatively, but that said:

1. Driving for Dollars

2. Diving into property records

3. Networking

4. Knocking on doors of apartments you might suspect are owned by mom and pop

5. Checking with property management companies about who they manage for that wants to sell.

Hope that gets you started, are you looking in the Tampa area or elsewhere in the country?