All Forum Posts by: Dave Grimson

Property taxes were included in the analysis - 3900/ year I believe I'm also a licensed real estate agent so will save some money on that end Thanks for the feedback

Tommy Sowell, yes there are separate utilities.  In the listing it states that the current owner chose to include the utilities in the rent because the profits were higher - My opinion is I dont want to deal with it - I would likely let the tenants pay all utilities except maybe water/serwer.

Here are my expenses per month:

Electricity - 250

Water ad Serwer 50

Insurance - 125

Vacancy 5%

Repairs and maint - 10%

Cap Ex - 3%

Assumptions

Income growth - 2%

PV Growth - 3%

Expense Growth - 2%

Anything i'm missing?

Hey everyone, i've been analyzing a lot of deals lately and want to get some of your thoughts on this property and my analysis. 

The Property:

2 family property,  864 sqft both units, 1860 yr built

unit 1 is  3 bed 1 bath, and rents for $1275

Unit 2 is 2 bed 1 bath and is not rented

Currently one unit is rented out for $1275 but all utilities included

List Price is $119,000, been on the market for 162 days

I havent been to the property to see it in person but cosmetically the pictures look very good - one unit has some updates (new kitchen and appliances) and the other might need some touch ups but looks well maintained.  Exterior looks 

My analysis:

estimated purchase price of 110,000 with 20% down

Approx 10,000 in repairs

About 37,000 cash needed

2375  Monthly income (1274 for 3 bed and 1100 for 2 bed) - depends if I would continue to let tenants pay utilities or not - this example i'll let tenants pay utilities

2375 -  Monthly expenses 1564 =    $811   Cash flow!!!

Let me know your thoughts, seems too good to be true but maybe I will find repairs after going to look at the property.

Thanks in advance for your feedback

Dave

If you want the job done right you should do it yourself and discount the estimated repairs into the sales price. This is especially important if you plan on holding onto the property for a while. If you let the seller do the work you never know what your going to get, they will most likely hire the cheapest contractor because what do they care, they will be rid of the property soon. Good luck! Dave

We just signed a lease with ALE Solutions last week.  We also received a serious premium above asking price (asking 2200 ended up getting 3000 / month with utilities included).  The negotiations weren't ideal - the lady I dealt with wasn't very responsive but ended up making the deal work and so far i'm happy with the experience mainly because of all the extra money we are getting!

Since they only moved in last week and this is the first time i've dealt with this type of situation I cant give you the full picture but I think it can be profitable.  We signed a 6 month lease with an option to renew month to month at the same price - what is the lease term they are asking for?  If the numbers make sense then I say go for it, just make sure you still take the same steps you would normally take, credit check deposit rules etc. 

Hope that helps, 

Regards,

Dave

Update on this property.  The first insurance company fell through but another one came along quickly and this one worked out even better!  Here are the specifics

After negotiations, we were able to bring the monthly rent up to $3000  - we had it listed at 2300! 

6 month lease with the option to lengthen month to month at same price

The tenants supplied a $1000 deposit and the insurance company gave us a $500 nonrefundable deposit and a $250 non refundable cleaning fee.

So far, i'm happy with the process although the insurance company rep wasnt very responsive and took much longer to get the tenants in than it should have - mainly because they work 9-5 and no more.

Regards,

--Dave

Thanks for all the feedback,

I was worried I might hear some horror stories - but since i'm not we will likely move ahead with them.  However the insurance adjuster seems to be slow moving - anyone else experience this?  How long does it typically take to get through the process and get the tenants in?

Thanks

Recently listed one of my rental properties and had an inquiry from a company out of Philadelphia (Rental is in CT) who helps relocate people suffering from an insurance claim. Apparently a family in the area had an insurance claim serious enough where they need to move out of their home for approx 3 months - maybe more. They claim that they will pay a premium on the rent but only for a short term.  Does anyone have experience with this sort of thing?  

House is listed for $2200 they say they would pay 10-20% on top of list price.  I'm wondering if its worth the headache and cost of trying to get another tenant in as little as 3 months.

Any past experiences with this would be helpful

Thanks

Dave

Ryan home inspections is always my first call.  

I have insurance experience all over Florida and can give you a general idea....

Say the cost of an average 1500-2000 sq ft concrete block home would be around $1200/yr.  Compare that to the same home but wood frame you would be looking at around $1750

Some insurance companies wont even touch wood frame homes in Florida - some will write frame homes but only if they are newer (usually less than 20 years old).  They all have different underwriting guidelines but ALL will charge a premium for it.

Bottom line is you need to talk to a good agent who can write with multiple carriers.  ASI (american Strategic Insurance) and Florida Family insurance are two that I know will write wood frame homes.

If you need help with quotes, I can set you up with one of the agents at my current company - we run insurance agencies for banks/credit unions all over the country, many of which are in Central Florida. Just send me a message

Hope that helps, 

Dave Grimson