All Forum Posts by: Collin S.

Originally posted by @Christopher Phillips:

@Collin S.

Either have the guests clean up after themselves, or hire a cleaning company that will stop in take care of bedding and towels and such.

How close do you live near the property?

It is next door.

Does anyone have any tips on how to handle cleaning of the unit after guests leave? There is a small window of time each day to clean and it is almost impossible to do it yourself while working a full time job.

Just for fun, let's assume you have $100,000 in your IRA . What would you do with/where would you put the money to work (real estate or not) if you had aspirations of being financially free in 10 years?

What do you guys think?

When repairs are paid out of escrow, are they typically distributed this way?

I am closing on a 2 unit in two weeks and was able to negotiate a new roof and other minor repairs to be made after close using funds from the seller out of sale proceeds. We have written estimates lined up from licensed/reputable contractors. These proceeds are held in escrow and the title company will issue checks to the contractors to make repairs. I don't want to pay the contractors 100% upfront before repairs are completed due to fear that repairs will take a long time and not be a priority since they have been paid upfront. 

What are my options at this point? It sounds like the title company is not keen on paying half of costs up front and holding/releasing the other half upon completion of repairs. Am I able to have title company issue checks to my name for repair costs and then distribute funds myself accordingly?

Originally posted by @John Leavelle:

Howdy @Collin S.

You need to provide additional information for us to conduct an adequate analysis.  

What type property is it.  2, 3, 4 units?

What are the current rents for each unit?  Which one will you occupy?

How old is the building?  What is the current condition?  Completely rent ready?  No work at all needed?

You need more expenses listed.

CapEx and Maintenance are two separate items and should be accounted for that way. So I assume you are saying 5% for each. Unless you know for sure all systems, components, and appliances are in top condition or new I would increase the CapEx to 10% until you have the property inspected. An inspection will provide you with a more accurate evaluation of the current condition and life expectancy of all major components and appliances. From the report you will be better able to determine a more realistic CapEx reserves requirement.

Property Management should be included in your analysis.  Even if you plan to self manage it is strongly recommended to include the expense for two reasons.  First your time is worth something.  Second, if you are planning to build a portfolio of properties you may need to have PM at some point in time.  You will want the property to still cash flow when that happens.  If you do not include it now you may regret it later.  Besides if you self manage that expense really doesn’t occur.  Add 10% for PM.

Utilities.  Are all utilities paid by tenants?  In multi family properties there still can be common areas covered by the owner

PMI. You will have to pay PMI as long as your equity is below 20%. With only a 5% down payment you obviously are below 20%.

There are multiple other miscellaneous expenses that will eat into your cash flow.  Lawn care, Pest Management, accounting, legal, etc.  Add at least 5% for Misc. expenses.

What is the interest rate for the loan?

You need to be realistic and stay conservative in your analysis.  If the actual expenses are lower then all the better for you.

Thanks John, I will provide clarification:

The property is a 2 unit- a 3/2 house with a 1/1 detached mother in law apartment. I plan to occupy the house and STR rent the 1/1( house hack) to start off. The building is 1920's but has been remodeled. We were able to work in a new roof (both buildings) and small foundation issue on 1/1 to be fixed out of seller's proceeds at closing. It is rent ready. We are post inspection.

I have accounted for lawn care, pest mgmt, and tenants will pay utilities.

The loan is 5% down with NO PMI. The only cost not built in would be 10% for PM costs. With PM @ 10% factored in, this would cash flow about $300/month.

Amir Magar closing costs are factored in. No rehab costs. I’m going to owner occupy, so 5% down with no PMI is great. I’ve accounted 10% total for capex and repairs. There will be a brand new roof put on at closing.

Hey guys, I'm starting to get my feet wet with investing. What do you think of this deal? Am I missing anything? I plan to owner occupy one side to start out, but numbers are assuming its fully rented..

$225,000

5% down

Multi Listing ~ 61%

Single Listing ~39%

A little more disparity up here. 

I am new to the Airdna site. I am analyzing a zip code in Jacksonville. I really don't understand what the "regulation" grade means. Why would this be so low and the other grades be so high?