All Forum Posts by: Dan Royer

So I’m going to look at a property in Wilkes Barre this evening. It sounds very promising. It has some remodeling work done to it already. The sellers agent said it could use about $10,000 worth of work yet and that the seller is looking for a quick cash sale. I was thinking of offering $45,000 and it’s a 3 unit building. 1/1 2/1 and a 3/1 units. It sounds like a great deal to me but I’m worried about the city and all of their regulations. Is there anything I should look into before going into contract? I read on the city website that I will need a rental inspection before I can rent the place out and I’m assuming I should make sure the owner has a new certificate of occupancy on the residence and had permits pulled for all work done. Any advice for investing in this area would be great. Also the property is on main st two blocks down from Kings college and it is not in the flood zone. Thank you Dan

When do you plan on hosting the event? I’m new to real estate investing and am looking to network with people to find a good deal on a multi unit rental.

@Kristina Heimstaedt Yes taxes are that high in my area. I'm currently paying $3000 / year for my 3 bedroom house that appraised at only $100k. I was just ball parking the interest rate on the high end. I'm sure with my credit score I can get something around a low 4 or better. The rent ability in the area is very good. I was reading the average vacancy rate in the area is only 5.3% and the property is located just minutes from a shopping mall, bowling ally, hockey rink, major highways. Pretty much anything you need to buy is within a 10 minute drive. 

Half a mile away from the property is a big apartment complex that has a fitness center, tennis court, basketball court, pool. They have similar sized units as this property and they are getting $1090 / month for the 2 bed room and $1205 for the 3 bedroom units. So I was thinking there should be room to up the prices on both the two bedroom units even though I do not have the same amenities.  

I forgot to add that even if I’m forced the sell the property early I should be able to break even on year two and any year after I will have profited on a sale. I have not called for a quote on the property yet for myself. The insurance price is from what the current owner is paying on the property.

Thanks for the input. I was looking at the numbers for holding and it seems like after 11 years my IRR starts to decrease. It peaks at 15% at year 10 and by year 15-20 it’s around 10% with self management. So my game plan was to self manage and being it would be my first property if I get to the point where I can no longer self manage or I approach year 10 I would like to do a 1031 exchange on the property.

Purchase price $230k 30 year loan @5% with 25% down Unit 1 2bed/2bath $925 Unit 2 2bed/2bath $825 (15 year tenant) Unit 3 3 bed/3bath $1200 All units also have a family room and laundry room. And there is off street parking in a paved lot next to the building. Taxes $6042 Insurance $1500 Electric in common areas $600 Water, sewer, garbage $1100 Maintenance & CapEx (10% each) $7080 Vacancy (6%) $2124 Loan payment $11,112 Income $35400 Operating income $32276 Operating expenses $16322 NOI $16954 Cash Flow (after loan) $5842 $162 per unit per month 7.4% cap 9.1% CoC Rent to value of 1.2% 5 year hold at 3% appreciation 2% income and expense increase 93.9% ROI and 14.2% IRR The property is newer than most multifamily properties I have seen listed for sale, like the one built in 1884 that I looked at the other day but had severely outdated electrical (knob and tube) and plumbing which scared me away from the deal. In the immediate area around the property there are two fairly newer housing developments that where built on farmland that was sold off.

A 3 unit building just came on the market in my area that I think looks promising. These are the numbers I got with the BP calculator with self managing. With using a PM the property is looking to only make about 4%-5% CoC but I do plan on self managing the building. The building was built in 1972 with off street parking in what I consider a C area. I like that the place is a lot newer than majority of the property I see in my area which I think will help significantly with the capex. Also because of the location and unit sizes (1200-1500sq/ft) I think the place will rent out very easily.

https://www.biggerpockets.com/buy_and_hold_results/505355

Do you think this is worth pursuing or should I keep looking? 

Thank you guys for the warm welcoming and @david Lin thank you for the info for screening tenants. I do plan on self managing but was hoping to have a good management company on hand if I would need assistance or to help find tenants. Do you guys have any good building inspectors you could recommend in the area? And do they actually go up on the roof for you? I hired an inspector once who wouldn't go up on the roof of a two story house and I was very disappointed by that.

Hi my name is Dan, I'm a construction worker from Slatington looking to invest in a multifamily rental property. I'm hoping to one day be able to make enough from rental income to be able to get out of the construction industry. I'm looking to purchase my first multifamily property in the Lehigh Valley area before the end of the year and was wondering if I could get some advice from other local investors in this market and if you guys would be able to recommend some good property managers? I plan on managing the property myself but would like to find someone to possibly screen tenants for me for the first year. I hope to hear from other investors in this market and to hear that such a booming area has been a great place to invest over the years.