All Forum Posts by: Nathan Coldsmith

I honestly feel is no other community more knowledgeable, diverse, and helpful than BiggerPockets! With that said my wife and I are looking forward direction: My wife is apart of a great successful MLM company and we are clearing $2,500/mo currently. However we know we have the potential to grow and scale to upwards of $30,000-$60,000/mo. What success actions need to be made to get there, what steps need taken to reach that goal?? Has anyone on here had massive success with MLM? Exactly how did you do it? My line of thought is to spend less and less time working in the business and more time working ON the business.. hence the fact we are considering to hire a VA. What is you biggest advice/tip.? Thanks in advance! We are excited to get our income up to funnel into massive RE Investments!!

Needing some help here from the Bigger Pockets community!

Currently in negotiations of purchasing 11 multi-family buildings and some being multi use properties.. our biggest opportunity yet!

The seller is on board with seller financing and we choose to only thoroughly look at 2 properties, run numbers, in hope of coming to an agreement on price and then using that model across the board for ALL the rest of the properties..

What I'm finding it there is ALOT at stake for both sides of the potential transaction. Alot is riding on how we both analyze these two properties! Almost too much at stake that we may not come to terms..?

Am I looking at this wrong.? What is the better approach for both parties when looking at a sizable portfolio and negotiating a return/ purchase price.?

All help is appreciated as always.

THANK YOU

Charles, John, Jarrin and Gwyeth thank you so much for the input. You guys are great. It is a big help with my blind spots on this deal.

I will be self managing this deal (no management fee) running my numbers asking price with a 7.5% vacancy rate, 10% cap ex, and an extra $50/mo for legal fees/ pest control etc. Which I feel is conservative please correct me if I am wrong.

Running the numbers on the deal as is per the owners management paying all utilities is as follows:

-$122/mo total cash flow

-$1.74 COC

However, with the only change being mandating that the tenants now pay their rent + electric (Normal occurrence in my market) Estimated $100/mo each unit x8 paid by the tenants. The projected return is:

9.16% Cap Rate

$677/mo Total cash flow

9.62% COC

Now, if I only change the purchase from $349,000 to $300,000... The projected return would be:

10.85% cap rate

$1002/MO Total cash flow

16.57% COC

Over all the deal looks good to me with a purchase price of $300,000.

I may be suffering a little from analysis paralysis here.

Hello all,

Over the past several weeks i have been analyzing an off market FSBO 8 unit apartment building and would love to know your thoughts on this deal.

Current owner purchased in 2002 for $210,000

Was listed in 2007 for $429,900 (listing expired, not sold)

-The owner is currently asking $349,000-

The property consists of:

6 one bedroom apartments

2 two bedroom apartments

Coin operated laundry

Storage shed

Tenants are on a month to month lease and average rent is $665/month (my calculations are based at $675/mo due to coin opp income, storage shed income when rented out, and converting a tenant paying weekly to a $675/mo lease)

All 8 units are heated by electric baseboard heat and separately metered. I believe that the natural gas for the hot water heaters and gas ranges are separately metered also.

Here is the interesting part: The owner chooses to pay all utilities costing him upwards of $17k annually.

There is ROI opportunity by simply keeping the rents the same and mandating that the tenants now pay their electric utility bill (est. $100/mo each unit x 8 units= $800/mo savings in expense $9,600 annually). With that change, we would now be $90/mo positive cash flow per door!!! However, With substantial management changes as noted above, to force appreciation and ROI, we could expect vacancy turnover and potential loss in eviction initially.

From our little bit of experience we found we can hold market rent + electric at our other properties we own.

Based on the small amount of expirence I have, I am inclined to make an offer to the seller as such:

Contingent on:

1)All deferred maintenance completed or a $10,000 sellers credit directly for repairs and maintenance

2)All units move in ready condition per buyer standards

If sold at current (100%) occupancy we offer $285,000

If sold at 50% tenant vancancy we offer $300,000

If sold at 100% tenant vacancy we offer $315,000

OR 100% sellers financing with a purchase price of $330,000

You can see it is counter intuitive to pay more for a non performing asset, however we save eviction costs/ time while being in a strong position to advertise and fill the deal with properly screened tenants locked into our lease, paying at our desired terms.

**ideally we would like to negotiate a seller financing deal, conserving capital. However, if the seller wants paid in full it would reflect a lesser purchase price amount. What potential do you feel for refinancing and pulling some of our capital back out of the deal after 6 months.? What are your thought on this deal?

Does anybody else have issues and problems with inherited tenants? I've noticed inherited tenants require more attention, management hassles, and carry a sense of entitlement, do not listen/ respect, and leave the place in unsuitable conditions when they leave. 100% of our issues so far this year has been from inherited tenants. Sidenote: Even managing a business with "inherited" employees can have extra challenges. What are your biggest tips in regards to this matter?

My wife co-own a 10 housing unit and 8 storage unit portfolio. The goal is for the properties to pay themselves off with positive cash flow in time so each partner has 3k in passive income. Each partner equally contributes capital for down payment of the next investment. We just paid off our personal home, we are personally debt free and have access to our 100k HELOC. We will continue to save aggressively, and intend to purchase cash flowing assets. In light of our current position. What effective options are there for us to accomplish financial independence and passive income rapidly? I’m thinking the BRRRR strategy with HELOC would be effective and choosing to invest independently from the partnership? Any thoughts or creative advice? Thanks in advance

Get a call late last night that the upstairs unit has a pipe that's gushing water.. also flooded the unit directly under.. drive 30 mins,  shut the water off.. talk to the tenant to find out they weren't properly heating the unit, and they knew that the pipe was frozen for several days. Never contacted us,  and came back to find it busted..

Hello all, I'm 22 years old, married, my wife and I bring home a comfortable combined monthly income. Our ultimate goal is financial independence through building streams of passive income.. We don't want the conflict of interest purchasing buy and hold properties because we are partners in an LLC that is specifically purchasing buy and hold properties. We and our partners agreed to not pay ourselves profits for atleast 5 years if not more. Besides Buy and Hold RE, what other real estate or non real estate vehicle can we use to build passive income streams and reach financial independence.? Currently about 50% equity on our personal residence and with continued grind we can have our personal mortgage paid off around 1.5 years. Currently have a $23,000 HELOC Liquid emergency funds of $16,000 Where would it be wisest to apply our money, both on hand and the extra we earn after expense.. with $10,000 being our minimal amount for emergency funds Thank you greatly, -Nathan

My why is to provide financial independence to my parents. They both have sacrificed greatly and worked tremendously hard to provide for me as I grew up giving me a life that they never had. My dream is to give back to them, provided them a retirement, let them put there feet up and enjoy life not needing to work. Recently formed an LLC, closed on our first deal last Thursday. Our future looks bright in REI. I have been truly blessed my 22 years of life, God is good. -Nathan Coldsmith

Thank you all for the great input! It is greatly appreciated.

My offer placed was an all cash offer provided from a LOC. Knowing that would be an attractive offer for the bank, and no contingencies.

The rules for this type of property were the first 2 weeks, bidding was solely open to those looking to purchase the property for themselves (first time home buyers).. after those 2 weeks the property would then be open to investors..

With those constraints in mind, my fiance and i were planning to purchase, renovate, and hold to live in ourselves long term or rent out for X amount of years, then sell.. we also hold the label of first time home buyers.

I've driven by the property and noticed extensive renovation being done to the property. The intentions for the purchaser to flip are very prevalent.

My biggest goal would be so save a future couple or person looking to invest or make their dream purchase this frustration of injustice, by the same party. I agree that the listing agent should loose his Realtors licence if found fraudulent.

My second goal would be to recuperate, lost time and expenses,. Driving to property multiple times, having skilled contractors come out and give estimates, the whole process.