All Forum Posts by: Dennis Haber

So, maybe a low offer would be in order.
I should offer then 20k to see what happens.
I should check on all major expenses and
any other code violation repairs.

OK, anything else?

Further, the area is a low income area
30-35k anual income, appears to be
a safe neighborhood but older neighborhood.

Rents should be 425 per unit, I thought
an offer of 29k might be sound.
I would also pay cash. I do realize
turn over might be high. But at the right
price this could be a deal..

Brick Duplex, asking price is 49000. Both sides are least
at $360 and $365. Owner pays water/trash only.

Duplex was built in 1930. Will need a roof soon,
Inside units are in fair condition, no evidence of water
or structural issues. No major repairs needed to
kitchen/bathroom etc.

Duplex has about 675 square feet per side, 1/1 with
detached 2 car garage in rear of property..

Thank for all the support on this apartment.
I did not follow though on purchase.

This was not a deal..

Thanks

This was a lot of help, thanks everyone. It is always more
educational when you have an actual deal, because you are forced to learn. If there is something else I can provide as
far as information goes let me know..

Dennis

Questions:

1. What is the age of the property? 1960 all brick.

2. What is the current ECONOMIC vacancy rate? Fully leased.

3. What is the collection loss? Class C screams slow pay and evictions...especially at a $330/month price point

4. Why 3-yr debt? Is it the loan size? Is tied to LIBOR or prime .

5. Does your LOI state that you get to see their books for actual repairs and such? Yes, I have 2008 to present. Some totals are mentioned.

6. Have you interviewed local management companies to see what they think about the area, the tenants, the property, etc.?
Done a walk through, not bad at all.. The area is lower middle class worker. Some retired.

7. Where do you see the upside? Bumped rents? Poorly managed? Other?
Bumped rents are what I see, average here is $450 with
bills. Bills average $47 per month based on P&L .

I can help you with a LOI if you promise not to sue me
I do solemly swear not to sue..
Thanks for any help..

Dennis

1. I tend to agree
2. Agree
3. Actual expenses stated
4. 20yr mort, 3 yr arm
5. Owner pays
6. This is a long term Tenant, Tulsa Housing authority pays rent.
7. 20 yr mortgage
8. Agree, but no fear of plumbing leaks from above.
9. ? like what expenses..

Thanks
Dennis

Previous post.

Looking at a 12 unit apartment, owner is asking 288k.
There are 3 buildings, one of the 3 buildings is for laundry, hot water
heater and storage. Court yard layout with units facing inward towards
court yard. All single story.. Apartment has a stable rental history for
2008 to present. All rents are 330 per unit (1 bedroom) one is 530.
Class C property.

Offer is at 240,000
I will put 20% down

Rents 2008 actual 48268.87
Rents 2009 actual 46208.68
Rents 2010 thru april 16015.59

2009
Other Income 2090.45
UTILITIES 12,622.26
TAXES AND INSURANCE 5,004.58
Debt Service 20yr 6.25
3yr ARM 1461.00
Maintenance 5 % ?
actual $1860 make ready and $1251 parts and supplies
Management 5 % ?
I will manage.. because its close to me <15 miles

Any thoughts on with new information if this is a deal..
Some room for upside exists, in my opinion.
I am capable of doing most of the maintenance

Thanks
Dennis

Here are my the actual P&L for 2009.
Current owner has management etc..
I would run propery myself, keep this in mind
I would do maintenance myself.

Jan - Dec 09
Ordinary Income/Expense
Income
4009 · RENT
4011 · RESIDENTIAL RENT (INCL. VACANT) 46,028.57
Total 4009 · RENT 46,028.57
4045 · RENTAL LOSS
4050 · VACANCY LOSS - RESIDENTIAL -2,438.00
Total 4045 · RENTAL LOSS -2,438.00
4070 · RENT CONCESSIONS
4072 · RESIDENT CONCESSIONS -82.00
Total 4070 · RENT CONCESSIONS -82.00
4101 · MISC. INCOME
4110 · LAUNDRY INCOME 1,126.73
4115 · LEGAL/EVICTION FEES 236.00
4125 · PET FEE 137.72
4130 · LATE FEES 560.00
4177 · NSF FEE 25.00
Total 4101 · MISC. INCOME 2,085.45
4170 · UTILITY RECOVERY
4026 · LBP SPREAD 1,860.00
Total 4170 · UTILITY RECOVERY 1,860.00
4185 · ASSESSED CHARGES
4186 · KEYS, LOCKS, LOCK CHANGES 20.00
4190 · PET DEPOSIT - NON REFUNDABLE 200.00
4192 · OTHER ASSESSMENTS/IMPROVEMENTS 140.00
Total 4185 · ASSESSED CHARGES 360.00
Total Income 47,814.02
Expense
6200 · ADMINISTRATION
6220 · BANK FEES 44.61
6311 · OFFICE SUPPLIES/COPIES 105.78
6313 · EXPRESS MAIL/STAMPS 134.93
6320 · MANAGEMENT FEES 3,196.56
6334 · EMPLOYEE ACTIVITIES/EVENTS 29.77
6340 · PROFESSIONAL FEES 29.17
6345 · ATTORNEY FEES 552.04
6351 · ACCOUNTING SOFTWARE 17.95
6352 · RADIO USAGE 345.19
6389 · LATE FEES/SERVICE CHARGE 5.00
Total 6200 · ADMINISTRATION 4,461.00
6205 · MARKETING EXPENSE
6211 · NEWSPAPER (TW & HISPANIC) 58.66
Total 6205 · MARKETING EXPENSE 58.66
6330 · ADMINISTRATIVE
6333 · EMPLOYEE INSURANCE 225.00
Total 6330 · ADMINISTRATIVE 225.00
6400 · UTILITIES
6448 · ELECTRICITY- VACANT 305.87
6449 · ELECTRICITY- RESIDENT 844.25
6450 · ELECTRICITY-COMMON 887.00
6454 · GAS-COMMON 6,528.87
6455 · WATER CONSUMPTION 1,273.09
6456 · SEWER 1,925.64
6458 · STORMWATER 152.96
6459 · REFUSE TIP FEE 54.40
6460 · EMSA Fee 43.68
6547 · TRASH PICK UP 606.50
Total 6400 · UTILITIES 12,622.26
6500 · REPAIRS AND MAINT.
045 · PAINTING SUPPLIES/DRYWALL 133.32
6519 · EXTERMINATING SUPPLIES 36.00
6523 · MAKE READY SUPPLIES 39.89
6539 · EMPLOYEE MILEAGE (OFFICE/CREW) 347.75
6544 · MAINT SUPPLIES/REPAIRS 517.75
6551 · EQUIPMENT RENTAL 5.00
6643 · PLUMBING PARTS 171.61
Total 6500 · REPAIRS AND MAINT. 1,251.32
6538 · MAINENANCE PAYROLL
6382 · OVERTIME TO DO 134.56
6543 · REGULAR MAINT. 185.12
6546 · REGULAR MAKE READY 632.48
6548 · REGULAR TO DO 4,188.78
Total 6538 · MAINENANCE PAYROLL 5,140.94
6700 · SERVICE CONTRACT/CONTRACT LABOR
6383 · CARPET CLEANING 185.00
6386 · LAWN CARE/LANDSCAPING 1,412.27
6530 · TENANT ALARM 41.17
6707 · MAKE READY 1,515.00
6717 · CHEMICAL LAWN TREATMENTS 220.00
6721 · EXTERIOR PLUMBING 375.00
6731 · EXTERMINATING 180.00
Total 6700 · SERVICE CONTRACT/CONTRACT LABOR 3,928.44
7000 · TAXES AND INSURANCE
7010 · REAL ESTATE TAXES 886.50
7013 · PERSONAL BUSINESS PROPERTY TAX 1,873.00
7023 · PROPERTY & LIABILITY INSURANCE 2,245.08
Total 7000 · TAXES AND INSURANCE 5,004.58
Total Expense 32,692.20
Net Ordinary Income 15,121.82
Other Income/Expense
Other Expense
7510 · CAPITAL REPLACEMENT
7532 · REFRIGERATORS 200.00
7538 · WASHERS 783.18
7583 · HEATERS 215.95
7585 · HVAC 660.04
Total 7510 · CAPITAL REPLACEMENT 1,859.17
Total Other Expense 1,859.17
Net Other Income -1,859.17
Net Income 13,262.65