All Forum Posts by: John Miller

Henrietta:

 Since your friend's mother died without a will of any kind, my best advise for your friend to hire a estate or probate attorney. Since she is the only child she will receive all of her assets, but it will have to go through  probate court. Let's assume there is equity in the house. If your friend does not have the money for an attorney I think the attorney would take payment after title to  changes to her and the house sells.  I think he also can get the foreclosure process stopped until the probate in the court is settled.

If you just want to find out title of the property and if your friend's name is on the loan. just have title company do a search for her. I believe Utah is a deed of trust state so names of trustors (debtors) will be on documents. Title to the property will show on the title.

Good luck

Thomas

Your expensive percentage seems pretty low. Look at the current owners history(request his schedule E from his federal tax return for the last 3 or 4 years that will show real expenses and income). Also remember with only 2 units if one is vacant for only 1 month that is about 4.2% vacancy.  As far as the additional two units for only $15,000 that sounds very good, but first check the zoning in the city to find out if you are allowed 4 units on that property.

Another factor to consider is that you stated it in in a C area. That is ok as long as the area is improving and not headed the other direction whereas the rents will start to go down. Your property value is based upon the income it generates, unless some big redevelopments are going on where the developer is purchasing based on size of your land and needs your property.

Good Luck

Chris

Welcome to BP. I am a commercial real estate broker in the Phoenix market.

Feel free to contact me with any questions to have. I have been in the business in the Phoenix area for over 30 years.

Floyd

Welcome to BiggerPockets. Wholesaling can be good in most markets Cedar Rapids should be a good place. You just need to get your name out there that you are a buyer who can close fast if the price is right. Remember you will make your money on the buy. If purchased at great price there should be a buyer at a higher price.

Good Luck

Brandt,

Thanks for the compliment about my education level.

I grew up in the Washington DC area. Just about everything there is old. Comparing a old triplex there to an old triplex in Phoenix is night and day. In the DC area there is no new land that can be developed into new apartments, so what happens is after some of the older apartment units get in bad shape someone buys them tears them down and builds a new apartment complex. The Phoenix area generally always has had more ground in a new area to build new developments. People in nature then go to the new areas. The older apartments just get older and the tenant mix just gets tufter. Apartment Builders in Phoenix rarely build a new complex next or near an older one. There are some exceptions Tempe because there is no new land. Now don't take me wrong about older duplex and triplex units there are a lot of guys who make a lot of money owning and renting these units, they are in general very hands on management.  The newer units are not taking business away from the duplex and triplex market It is two very  different types of tenants. Hope that helps.

CCIM. I have had a lot of years of experience in commercial real estate and have taken many college and other classes. In my option taking just one of the week long classes with the CCIM Institute will teach someone new coming into the business more in a week than they could learn in 2 years in any other place.

John Miller CCIM

http://www.commercialrealestatephoenixarizona.com

Mubasher

Both Jon and Mark are correct.

If you have not lease many properties before and know what goes into a lease that works for your needs, I would suggest to call around interview leasing brokers that primary represent tenants and not landlords. They can find the properties for you and give you advise on what is currently happening in your market place. After you find a space I would then suggest to hire an attorney who works in the real estate lease area.  I am not sure what length of term you want. But the lease needs to go into great deal in who is responsible for what. There is where the attorney can help keep you safe. 

Good luck

John Miller, CCIM

Bill

As a prior commercial real estate lender for many years. Here are several things to need need to do and how most lenders will look at the property in today's lending world.

First call around and find lenders who are doing a 10 units apartment deals. You will be surprised how few there are in some markets.

The lender will look at the past history of income and expenses. After all of that they will take the current rents use AL LEAST 10% vacancy, even if it is 100% rented. They will use expenses that are customary for apartments in their market place. When they arrive at the net operating income they then will use a debt coverage ratio. This ratio depends on your market place, but it will be no less then 1.2. That will be the amount they will allow for debt service. Depending on amortization and interest rate will determine the amount they will lend. Also they will look at your personal net worth, income and credit report.

Based on all of the above will determine if they will do a loan and how much. Also you will have to personally guarantee the loan.

Good luck

John Miller, CCIM

Josh,

I am not sure about the real estate laws in Michigan. I would suggest you find out the answer if a residential lease under 12 months has to be in writing. Many states only require a written lease if the lease is 12 months or longer. That said and assuming no written lease is required as the lease is now month to month, then increasing the rent could be in as simple as a phone call and have tenant accept the new lease payment, I would then follow up with a letter about the conversation and their acceptance of the increase rent. If a written lease is required I would just do an amendment to your existing lease increasing the rent and have the tenant sign.

Good Luck

Derek,

The big problem in 2 to 4 units in the phoenix market place, is that they have not build any 2 to 4 units properties in maybe the last 40 years, due to the increase of the land cost for multi-family units. All of the units are going to be in older areas. My suggestion would be to buy single family units until you have made enough money then enter into apartment units in the 25 to 50 unit range. They also will be older areas, but you will find some of them in better locations.

John

Since this is your first apartment complex you are purchasing get an idea what would be normal operating cost for a similar 22 unit apartment complex. If you don't have the knowledge go to a property management company and discuss with them what they think would be normal operating cost. The current owners operating statements could be under stated in order to make the property more appealing on the P&L. Also when you are doing your walk through on each unit ask the tenants if they have any problems with their unit. You can learn a lot from them.

Good luck