All Forum Posts by: Daniel Zapata

There are a lot of opportunities to leverage your coding/AI skills to analyze deals. For example, you could do some interesting things with MLS feeds, combined with government data / other sources to help focus on certain locations.

In terms of leveraging your time, you could look at doing some bird dogging to help investors find deals.

Good luck!

One thing you could do, especially since you're going to have 8 months of bills to reference before you can change anything, is to update the lease to say that up to $x is covered per month in electric and they are responsible for anything over that.

You may also want to explore what it would take to get those items off of their meter, though it's usually prohibitively expensive.

@Peter G. I would first check out the comparables in the area that are a little nicer than yours to get some ideas. If you over improve a property you may not get the forced appreciation you expect.

I like the combo of tile in the kitchen + bathrooms then LVP for the rest of the place. However, you should have better results with higher end LVP in terms of water-related issues. I only buy 'light commercial' grade or better.

The description says it needs tlc, but I don't see a budget for repairs. Is the ARV is the same as the purchase price?

If that's the case, I would try to find a property which is already renovated for that price or a property I could add value to at a lower price.

@Grace S. that looks like a lot of money to deploy for very little return.

Also, your capex, repairs, and management numbers seem very low, at least for my market (Sacramento, CA).

If the interest rate on your student loans is higher than the 3.125% for the refi, I would consider paying off the student loan.

You should also research the tax implications of doing this (I'm not an accountant). As I understand it, the interest paid on the portion of the refi not used on the property (i.e. to pay student loans) is not tax deductible. Your student loans may be tax deductible, so it's something to add to the evaluation.

@Tyler D. my first multi was a fourplex which consists of four separate buildings, each in it's own corner of the property. IMO, that's the best kind of small multi as each tenant gets their own yard and don't share walls. Unfortunately, they are also very hard to find in my market (Sacramento, CA).

If you're seeing the multiplexes selling for about the same as SFH x the number of units, I would check for more value add properties. Those with deferred maintenance or in need of updating + below market rents are what I would be looking for.

You do get some economies of scale with better value on insurance, property taxes, etc.

@Austin Powell I've successfully used this strategy for several properties. It allows me to make a cash offer for the place and fix it up before doing a cash out refi, get most of my money back and do it again.

One word of caution since it sounds like you don't have a stable income, you should have a decent amount in reserves as things will likely go over budget or you will have unexpected expenses. Also it will be hard to do a cash out refi. I would consider going in at a lower price point or partnering up for your first deal to mitigate the risk.

If the pipes are co-mingled in each building, it may be prohibitively expensive to sub-meter as you have to basically redo the plumbing. If not, you can add the sub-meter devices and they even make them with wifi modules so you can remotely check them and bill appropriately. Assuming you have property management, they should be able to take the bill from the water company and divvy it up based on the sub-meter readings - any common area water usage.