All Forum Posts by: Darryl Blalock

Hi All,

Was scanning the internet and found a property deal analysis tool that looks reasonably comprehensive.  I'm still very new to this and was wondering if anyone had any experience with this. Am I just as well off with the BP calculators?

Thanks!

Hello to all.  I'm now looking at quads in the Stone Mountain area of Atlanta and came across a property with a 27K annual income listed at 160K. I'd probably have to borrow my down payment, so essentially the whole amount would be financed. Before even going to look at it, I just want to be sure it's worth the trip. From the description given, I was able to narrow down its location, and the quad sits in a relatively stable B/C area, near schools, public transit and shopping.  All in all a decent location.  Currently waiting on the owner to respond with any recent improvements, so a big question mark there.

Anybody out there currently buying and holding in this area, about a mile west of Stone Mountain Village? What cap rates are you seeing? How does your actual cap rate compare to the rules-of-thumb calculations such as the 1% and 50% rules, or the GRM? What kind of per-door cash flow are you seeing?

I'm new to this, and running the numbers is still awkward, which makes me want to lean on the experience of others for guidance, at least until I get a deal or two under my belt.

@jeffkehl, yeah, it's a rapidly growing area with no signs of slowing. compared to other multifamilies in this area, this was pretty reasonably priced, at least in my opinion. Tons of shopping, dining and places to work. Local college within a mile or two. 

Rents average around $600, all are 2/1.5. 

Kinda stinks that when I submitted my offer,  there was already an offer that the owner was sitting on,  then accepted as my offer was enroute to them.  I didn't dawdle getting it in, either. I guess things just work out that way sometimes. 

However, this whole process, along with some awesome advice I've gotten from this post, has given me a new perspective from which to negotiate should that first offer fall through. 

HI Ethan! Awesome advice! Thank you for taking the time to help me out!

This quad is in Gainesville, As I read from my post in the multi-family board, maybe it's a little overpriced, but I don't have enough of a database of experience to know for sure.  My numbers did factor in 10% property mgt.  I sent an email asking for Sched E's and other pertinent info that you described.

As it turns out, the owner had another offer on the property, and she reach an agreement with them before seeing my offer.  Frustrating.

Oh well. I left my offer in as a backup, but I'm not optimistic.  However, if I do move into first place, I'm going to totally rethink how I'll approach negotiations.

SO, for now, I guess I'm back looking for a clean quad in a clean area.  Been thinking of Athens, but totally don't know the market. I live in Cumming.

Thanks again, Ethan for your help!  We need to meet some time!

DB

First, THANKS to all you guys for some awesome information.  Lots of things there that I didn't consider. @Annette Coker, which areas of Atlanta are you talking about?  This quad is about an hour northeast of ATL in Gainesville. I live in Cumming.  Luis, I will definitely read the book.  @Joel Owens, the only thing I could add is that the $21k is based on rent from the 3 units, the fourth being owner occupied.  So that may make the numbers look a little better. @Jeff Kehl, very interesting!

Just an update - as it turns out, the owner was sitting on an offer from someone else (unbeknownst to me) and after showing me the property, she came to an agreement with the other party.  Frustrating......  I left my offer in as a backup, but the advice from  you guys will definitely change how I will approach this deal, should the other fall through. 

Hi Guys, I'm new to this and could really use some expert advice. I also posted this in the multi-family forum - just trying to cast a wide net and learn all I can.

We found an owner-occupied quad listed at $275K. Nice clean building in a nice clean area. The other 3 units have long-term renters, and a new tenant is moving in to the previous owner unit. All are month-to-month tenants. All electric units, tenants pay own utilities. Trash is included in property taxes. All appliances are less than 8 years old, but the roof will need replacing in 7-8 years. Last year's rents were $21,300. I'm planning on using a property management service.

Got preapproved for a 4.125%, 30 yr conventional with 25% down. I don't have that kind of liquid cash, so I'll have to take out an equity loan on my primary residence. Not excited.

I ran the BP calculator, plugging in numbers as best I know, and my Cap Rate is about 6.75%. My CoC ROI is a little over 9%.

My lender seems to think that the unit is a little undervalued (elderly widow seller- wants to get out and travel), and that I may be able to cash-out refi in 6-12 months, recouping my initial investment. Is this reasonable?

We did submit an offer at $250K with a couple of escape hatches written in- waiting on word.

OK - what am I overlooking? Is this feeling I have just first-time jitters, or is there something that's gonna bite me? I really want to do the first one right.

I sincerely appreciate any and ALL advice!

DB

Hi Guys,  I'm new to this and could really use some expert advice.

We found an owner-occupied quad listed at $275K. Nice clean building in a nice clean area.  The other 3 units have long-term renters, and a new tenant is moving in to the previous owner unit.  All are month-to-month tenants. All electric units, tenants pay own utilities. Trash is included in property taxes. All appliances are less than 8 years old, but the roof will need replacing in 7-8 years.  Last year's rents were $21,300. I'm planning on using a property management service.

Got preapproved for a 4.125%, 30 yr conventional with 25% down.  I don't have that kind of liquid cash, so I'll have to take out an equity loan on my primary residence. Not excited.

I ran the BP calculator, plugging in numbers as best I know, and my Cap Rate is about 6.75%. My CoC ROI is a little over 9%.

My lender seems to think that the unit is a little undervalued (elderly widow seller- wants to get out and travel), and that I may be able to cash-out refi in 6-12 months, recouping my initial investment. Is this reasonable?

We did submit an offer at $250K with a couple of escape hatches written in- waiting on word.

OK - what am I overlooking?  Is this feeling I have just first-time jitters, or is there something that's gonna bite me? I really want to do the first one right.

I sincerely appreciate any and ALL advice!

DB

Thanks for the guidance! No plans to owner-occupy, so that eliminates a really good option. Didn't consider USDA-I'll look into that. 

Hello All!

New to the game, and really trying to get my feet wet without getting in over my head!

I'm looking at a couple of multi-family properties (4-plex, and 5 homes on acreage). I don't really have the  20% down payment that conventional mortgages would require. I'd like to get into one of these properties, and in my best estimation, the numbers work out, even at 100% financing.  I've asked about seller financing any portion, but have not heard back.

I'm looking for advice/guidance/information on possible options for getting into these properties.  And since I'm new to this, I'm wide open to any suggestions on how to evaluate multi-families and on how to do business in general.

Thanks to any/all who help!

DB

Hello All,

Pretty new to real estate investing and looking forward to learning all I can. 

Any recommendations for a newbie?