All Forum Posts by: Jimmy NA

Yes, the property has been managed in a "relaxed" manner. Owner has had it many years and has slacked a bit over the years, he has let things slide as far as up-keep and quality of tenants. But, these factors are worked into the price. I think I see opportunity......
1.) So, I should get month-month signed before closing, got it.
2.) Still not sure if I close with the realtive in one of the units? I could see this individual really resenting having to pay as time passes. I have learned people consume/spend etc. to their income levels: x amount comes in the door, x amount goes out in spending. Will this person adjust to this new "expense"? Will he adjust his spending in a very short time span? But, then again I could make it slightly below market rent just to keep the unit occupied and see what happens.....

Basic Info.

5 Units, Gross Rents: $2750
Proposed Purchase Price: $165,000
Total Expenses: $1100 per month

1) I have a 6 unit property I may make an Offer on. The landlord had leases but all the leaes have long expired. So, technically they are Tenants at Will or "month to month." How do I verify the "real" rents? The owner tells me they are $550, 525, 575, etc. But I could take ownership and the tenant tells me otherwise. I could imagine myself showing up the first month and the tenant tells me, "oh, no I have been paying $350 per month for ages."

2) How would you handle the following: one of the tenants is a relative of the owner and is paying little or no rent. If I buy should I have that unit vacant or take the building with the relative and hope I can negotiate a rent from a person who was living free for ages? I could imagine that this realtive will resent that they now have to actully pay. Seems like a headache will follow.

You're right.... Have to wait for the right deal. But, I got the itch to buy. I hate sitting by and watching others make the real money and grow equity. By the way, I am a RE broker (7yrs). Watched people make alot of $$$. Maybe that is over? The subject property is not on the market. I am dealing direct with the owner. I would say there is no desperatin here.

Where do I find these "DESPERATE" sellers? HUD props get bid up to market price....no deals there. Same with tax lien props. What are some other sources of leads?

Sellers don't like to give props away. People do not like to part with these assets easily.

I know the price paid when a person does not buy in a prudent manner. Just don't want to wait......do you know where I am coming from?

I would love to hear how you came up with that. Maybe just a quick summary? It would help me. In this town, in this condition it would sell for $225K. The problem is a seller, even the a naive seller, would know that 137, 500 would be robbery. I don't think I couls convince the seller to do that price, though I would love to get it at $137k.

Units: 5
Gross Income: $2750
Taxes: $300 per month
Water: $75 per month
Insurance: $150 per month (??)
Misc: snow/lawn $100 per month

Location: Lower incomes, typically high turnover, though relatively decent part of town.

Condition: plenty of defered maintenence, older baths ad kitchens, roof needs in near future; condition reflected in rents.

Misc.: potential for office use of 1 or 2 of 1st floor units, parking 10 cars, no garages
What would you pay?

Alot of great stories here. But, hindsight is 20/20 right? How do I get started in today's unpredictable market?

What about appreciation? Or a flip?

What if I could reduce that purchase price to $135K?

I can buy direct from an owner a 3 family at 155K. Here are the rents, $800, $750, $550. All rents without utilities. Taxes $350 per month. Estimate on insurance $150 per month. Not sure about maintenance, snow, lawn, etc. Most of this I can do my self. But lets say another $150 per month. Water, probably $100 per quarter. Only real immediate repairs are a new roof, est. 10-12K. Also, should probably pave driveway, est. 6k.
The big unknown is tenant reliability. Though new to the area, I know there is high turnover and problems with non-payment. I asked the owner about history on the tenents, they are all fairly new. Only one tenant has been there more than two years. The neighborhood is fairly nice and well kept. I do know incomes are fairly low and renters have a reputation for coming-and-going frequently because purchase prices in the arae are low. So, you get people that can not buy a home as renters.
With this info., what do you think of this deal?

I can buy direct from an owner a 3 family at 155K. Here are the rents, $800, $750, $550. All rents without utilities. Taxes $350 per month. Estimate on insurance $150 per month. Not sure about maintenance, snow, lawn, etc. Most of this I can do my self. But lets say another $150 per month. Water, probably $100 per quarter. Only real immediate repairs are a new roof, est. 10-12K. Also, should probably pave driveway, est. 6k.
The big unknown is tenant reliability. Though new to the area, I know there is high turnover and problems with non-payment. I asked the owner about history on the tenents, they are all fairly new. Only one tenant has been there more than two years. The neighborhood is fairly nice and well kept. I do know incomes are fairly low and renters have a reputation for coming-and-going frequently because purchase prices in the arae are low. So, you get people that can not buy a home as renters.
With this info., what do you think of this deal?