All Forum Posts by: Edward Liu

Are you new to the market?  Maybe the contractor or property manager is taking you for a ride.  The price is way out there - if the work is exactly what you stated above.   Does the bid has list of deliverables or just one liner?  Suggestion is to get multiple contractors bids and ask for detail breakdown of what will be done.  If this bid came from a property manager, then you should switch to different one - don't even think twice.

Not all areas of New Britain is good.  Ideally closer to the University.

For class C property, your numbers are not conservative, but in fact, could be overly optimistic.  It really depends on neighborhood, type of tenants, etc.   Your per turn cost likely will be higher due to damages to the unit.  I have more turns per year for class C properties.  Your initial closing cost and rehab cost all seems very low.  

2 options: 1) most common is to find lender that does loans for LLC. Interest rate is likely higher vs your convention loans. 2) in rare instances, some lenders will do convention loan at close and after close, allow you to transfer title to LLC without calling the full payment of the loan. You have to be lucky to find these lenders and make sure to receive written approval for title change before proceeding. Don't bother with big and well known banks. I have 3 duplexes that are conventional loans and later title transferred to LLC - so I know it can be done.

Liberty is generally good.  I have seen some multiplex in Liberty that are in very bad shape and had to walk away from 1 deal.  

Lee's Summit is good, but not sure you can get good return with current prices.

You can find good investment properties in Hartford with good tenants, just need to search hard, avoid certain areas, have good property management.   My suggestion is look at New Britain or Middletown for investment properties - I have some that cash flow extremely well with no tenant problems at all.  Price is not that much higher vs. Hartford.

The 2 examples I gave was from 2 different states.  Which state will not matter - as long as bank of the buyer is willing to treat such deals as commercial (package of more than 4 units - with more than 1 building involved in the transaction).   The bank is more likely to accept it as package if buildings are next to each other.   

To get around 'value is based on comps and not income being created', one potential is to buy/sell multiple 2-4 units next to each other.  For example, I have a 6 unit building where each unit is individually deeded.  Since I own all units in the building, it is being treated as 6-plex and value as such.  Last year, I sold 3 duplexes on the same street (next to each other) and buyer treated them as 1 commercial investment (with single loan) where price was more income based.

For large Multi family deals, it is common to have listing agent as dual agent.  When I sold one of my large buildings, I felt my listing agent was pro-buyer.  The buyers were some real estate investment firms each with more than 500 million in assets - guess listing agent was trying to develop long term 'relationship' with big clients, while I am a small fish.  I escalated the issue and listing broker changed the agent and reduced my fees.  I got better offers from other buyers (seems 1st listing agent did not present my deal to all potential buyers, he only presented to his 'select' list) once I changed the agent.

As seller, you don't want what happened to me where listing agent was limiting buyer pool to his 'select' clients.

If you are a buyer, you will be at disadvantage competing with large institutions no matter what due to cost structure.  You don't want the dual agent create environment where you believe you are in a bidding war - against yourself.

Looking for contractor recommendation in Durham NC - contractor who is reasonably priced and with decent work quality.