All Forum Posts by: Collin Savunen

Originally posted by @Nathan Gesner:

@Collin Savunen you can let the current tenants know you intend to screen them and increase rent to market rate. Let the Seller know that if a tenant leaves, you want to take it over vacant and find your own tenants.

 That is brilliant. Thank you. Then either I start with a full lot of qualified tenants paying full price or a clean slate to bring in new tenants

@Nathan G. That is good advice! Luckily the 4 Plex I am looking at all the tenants are month to month with rent far below market value. If I decide to pursue it when I put it under contract I am going to make sure it says I can market for new tenants.

Posting for the follow on comments. I am looking into finally get into REI by house hacking a multi family. I have my eye on a 4-plex. It has utilities payed by owner as well but that should be a plus instead of a negative. Means after you get it you can decrease the expenses by splitting the bill.

 @John Leavelle

Alright updated numbers

Duplex 

$195,000 pp 

$ 60,000 repair cost

$275,000 resale 

$255,000 used for mortgage (w/ 20% down and 4.85%)

$ 2,500 rental income

$ 125 maintenance

$ 125 capx

$ 250 prop. Management

$ 210 vacancy

$ 1,417 piti. (.75% insurance, $3,083 annual taxes)

$ 2127 Total monthly expenses

$ 373 cash flow

@John Leavelle good catch on the vacancy! mortgage based on 20% down at 4.5% (I believe I used). I included it because I was thinking of using hard/ private money at first to repair the half of the duplex that burned down then refi. However you have made me realize that if I do that my numbers change and the bank may not give me a mortgage at that because the duplex arv is less than the pp+repairs. I would have to negotiate the price in order to make this viable at all. I would want to create at least $20,000 in equity when I buy and repair. Meaning $275,000-$60,000-$20,000=$195,000pp. Let me run the numbers again on my lunch break and can you check them again then? I will tag you then.

@Mark Dolfini thank you! Yeah I meant to do 10% for property management. Thank you for the tip on property taxes may be different between investors and home owners. I will also do more research into the insurance and property management /w certifications.

Hopefully this posts holds the numbers better. On the app it gets rid of my new paragraphs.

$219,000 pp 

$  60,000 repair cost

$275,000 resale

$279,000 mortgage

$.    2,500 rental income

$        125 maintenance

$        125 capx

$        250 prop. Management

$ 1,540 piti. .5% insurance, $3,083 annual taxes

$ 2,040 Total monthly expenses

$    460 cash flow

I found a potential deal in Spanaway Washington. I am not moving on deals. I am doing the "run 100 deals before you start sending out offers" practice. I was a marksmanship coach and thoroughly believe for every round you fire you should dry fire at least 10 notional rounds. On to the deal. Duplex recently renovated and had a fire. $219,000 pp (that is asking price, I understand I should negotiate) $ 60,000 repair cost (1/3 the duplex burned down to the foundation. the other 2/3 was cleared structurally and livable) $275,000 resale (based weighted on a comp, same size, same quality 2 blocks away in a similar neighborhood as well as lightly on the few others in the area I could find) $279,000 $ 2,500 rental income /month ($1250/unit) $ 125 maintenance/month $ 125 capx/month $ 125 prop. Management/month $ 1,540 piti. (.5% insurance, $3,083 annual taxes) $ 1,915 Total monthly expenses $ 585 cash flow Even if I could only get it at market value would it be a good deal? Are my numbers right? Am I missing anything?

@Samantha Fairbairn it is a monthly Meetup ever third Tuesday at Ramblin Jack's. However there is not one in December because it get's busy for most people. If you follow the group on meet up they will send an update for the new year. https://www.meetup.com/Olympia-REI-Group/

@Matthew Nicklin congratulations!