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All Forum Posts by: Shaun Carl

Shaun Carl has started 8 posts and replied 34 times.

Post: SolarCity Coming to Buffalo - REI Impact???

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

So SolarCity broke ground the other day for a new 5 Billion dollar project building a manufacturing site that will bring 3k plus jobs to the area. It will supposedly be the largest solar panel manufacturer in the western hemisphere. 

I have 2 properties within a 3 mile radius of the new site. I had thought about selling one of these, but now I may just hold on to them. Has anyone had experience with really big projects/businesses popping up near their properties and the impact it has on appreciation and rents? 

If I am reading this correctly, you already qualify for the loan. Can you just purchase the property and then make a large balloon payment with the "gift" from your parents? 

Once the loan is in your name, it shouldn't matter where the funds to pay for the property come from. 

Now the IRS and taxes would be a different question that I couldn't answer. 

Post: Should I keep or sell my property?

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

Dain, 

Leveraging (to your comfort level) is a real estate investors best friend. Why use extra money to pay off a 2.5% loan when that money could be making you 10%+ depending on the property. Hey you should be able to make more than that in a low risk stock.  

This means you are losing out on 7.5% or more. 

I would always try to take the longest term with the lowest payment. This helps increase cash flow per month. You can always make big principle payments when you want too. 

Try not to look at the overall you are paying for the property after the interest. 

A very popular book on here and pretty much everywhere is called "Rich Dad, Poor Dad" I would suggest reading that if you haven't already and it will help you too understand much better. 

Post: Third deal - need some advice/thoughts

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

@Shiloe B. Never thought of the quiet by 6pm point. Good call. 

I currently have 2 - 4 unit buildings where insurance is ~$1000, but the current owner says they pay >$2000. I will def check with my current broker to see if I can get a better deal then. 

I am hoping to get 600-800 for the commercial. Anyone from Buffalo know what a roughly 1200 sq ft storefront rents for on Walden? Has kitchen and bathroom. It was hard to find comparables online for that type of place. 

110+375+475+600 = 1560

50% rule gives me 394 cash flow, if including the garage (very low maintenance), that's just under 100 per door which seems low for us, but I am hoping that I can raise the rents incrementally. 

Thinking

110+450+600+600(conservative for comm) = 494 cash flow

Anyone have thoughts on the deal as a whole?

Post: Third deal - need some advice/thoughts

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

@Shiloe B. Thanks for the advice. I wasn't sure if the commercial would deter tenants from the units above it. The current tenants have been there for years so that may help also. Do you or anyone know anything else that goes with renting a commercial unit, such as higher insurance? 

Post: Third deal - need some advice/thoughts

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

Hi guys, 

Its been a while, sorry. 

I am working on my third deal. I am currently about to purchase a triplex with a garage. 

Current rents are Garage: 110, 3 bedroom unit: 475, and 1 bedroom unit: 375 per month and there is the whole downstairs that the owners were using for a church, but will be leaving at the end of the month. These are low especially since they include utilities due to all being on same meters. Current owners never wanted to raise rents and had the current rents covering mortgage and expenses. 

searching for comparable apartments put rates at 650 for the 3 bedroom and 500 for the single.

I will be paying $16,250 cash and assuming a mortgage for 23k left for 5 years @ 5.5%. Comparables in the area are hard because it has a storefront currently, but I think they are close to 50k+ to be conservative. 

insurance: 2000 (due to a church in bottom unit - should be closer to 800 if all residential)

taxes: 3300

water: 350

gas: 1800

electric: 1000

assuming mortgage: 386

Should I keep the bottom unit a commercial type or rehab it into an apartment. It will need a bathtub or shower and a couple walls. It looks like it used to be an apartment, but now has a glass front. This would probably have to change also. It was gutted before the previous owners and they just put up all new fixtures, kitchen cabinets and studs and walls that were donated to the church. I have two other buildings that are both 4 unit residential, so I do not have much experience with storefronts or commercial. 

Should I also separate the utilities? Is the cost worth it? I am planning on slowly raising the rents to come up to comparables or just under, but dont like the idea of also paying for utilities. 

Thoughts on this deal? 

I am in the buffalo area. I have a 4 plex in Lackawanna and a 4 plex in south buffalo. The one in south buffalo is shady, but I have a great PM that takes care of everything for me. The biggest thing is screening the tenants. You can still get great tenants in these neighborhoods that stay for years. Good luck!

Post: Duplex analysis

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6
For my market in Buffalo these margins are too low. I would need something closer to 20% return to be worth it. I like to use the 2% rule (although I'm getting roughly 3-4%). So for an ARV property value of 190k to be safe I would need to be getting 3800 a month in income. Of course some areas you can't find these properties. Good Luck!

Post: S-corp taxes? Buffalo Accountant

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6
Steven Hamilton II Thanks. I think I am starting to understand. Our business is set as a 50/50 split between my partner and I. We currently are closing on one property tomorrow and another in the next couple weeks. They are both 4 units that should cash flow 800-1000 each a month. We are using a property manager for both. What would be considered a reasonable salary when all we do would be to collect rent checks and pay bills? Is this were we would need a CPA? Can we wait and see how much we make at the end of the year before deciding? We are hoping to roll all money into more properties as we grow.

Post: S-corp taxes? Buffalo Accountant

Shaun CarlPosted
  • Buffalo, NY
  • Posts 36
  • Votes 6

Does this payroll need to be done throughout the year or can it be done at the end?