All Forum Posts by: Cheryl P.

Hi BP, I've sent out my yellow letters and the leads are coming in (yay)! That said - I wanted to get your feedback on the deal which I plan to make an offer on this afternoon/evening. My intent is to wholesale it. Questions and details below:

Questions

1. Am I leaving enough meat on the bone with my $20K assignment fee or should I adjust this, if so by how much?

2. Is my repair estimate too low/too high based on the seller telling me that no repairs are needed and existence of the on-site property/manager despite the house being very old (built in 1909)?

3. I live in NY and the property is in OH. Any tips for virtually investing my way through this deal?

Details

Location: Dayton Ohio

4 Units

Rent amounts - $300 (for 3 units) $350 (for one unit) = gross monthly rent is $950 (accounting for property manager living rent free in one unit) tenants pay all utilities except water

Asking price: $10,000 (This is also the mortgage balance)

ARV: $50,000

Repairs: Owner says non are needed but I'm estimating $2,000 (I have no idea if this is accurate but I'm assuming since there is an onsite property manager, it should be in good shape, house built in 1909)

Seller motivation: 85 y/o tired landlord who wants to sell ASAP

Assignment fee: $20,000

MAO = .65(ARV)-Repairs-Wholesale Profit

=.65($50K)-$2K-$20K

= $10,500

This leaves me with a MAO which is slightly greater than my offer price.

@Gary Timmons welcome! I too lurked for a while but it's good to be "official". I've found the folks here to be very helpful, especially those in my target market Ohio. Best wishes!

@Michael Lauther thanks for the welcome! I'm happy to see another investor employing this strategy. I'd definitely like to hear more about your experience.

Thanks @Brandon Turner glad to be here!

@Khadijah New Ultimately the strong jobs outlook and strong rental market sold me since I am focused on multis. When I started researching properties online there were a good number that fit my buying criteria and the brokers I reached out to were the most responsive so that indicated potential for good opportunities.

@Jim Lally thanks for the welcome! I'm not an auditor but I've seen the crazy hours they work which I do not envy at all--reminds me of my former days in investment banking (no offense to any auditors or i-bankers out there). I decided on Ohio after doing some market research. Marcus and Millichap's apartment market reports, Integra Realty Resources has a cool report that shows major cities and where they are in the market cycle. From there I started calling commercial brokers and asking them about what they're seeing in their markets. Some key indicators in making the decision for me are first and foremost jobs (current and announced), population demographics (young, old, blue collar, white collar, etc), vacancy rates, existing # of units on the market, etc. Basically getting an idea of the current and projected economic health of an area.

Hi @Keith Boley thank you for reaching out! I'd love to hear about your team, and your experience with managing from a distance. I'll connect with you.

@Chris Masons thanks for the welcome! I agree with the margins in our part of the country (which is why I'm looking elsewhere at least initially). Will keep the forum posted with my progress for sure.

@Khadijah New welcome! There's definitely a wealth of info here to help you get started and provide support along the way. I'm focused on multifamily investing in Ohio but I live in NY. Maybe we'll cross paths in the near future.

@Dave M. ProspectNow is a souped up list broker and I believe it can also send out direct mail to whatever lists you select. It'll save you time of driving for dollars but it'll obviously cost you money.

@Jean Bolger Wow congrats! This is exactly what I'm looking to do in the multifamily arena and also in Ohio. In fact I think I may have analyzed this exact deal (found it on loopnet while searching for brokers) and the numbers looked great for my criteria - but I didn't have the funds like you did to buy at auction. Awesome job, would love to hear how your are progressing with it!