All Forum Posts by: Everett Fujii

I think it also depends on what scale you want to ultimately shoot for in real estate.

If you just want to be an investor that has a small(ish) portfolio that supports you and your families life style then I think accounting is a fantastic tool to have in your belt.  It'll help you understand how to structure things (not to mention what information you need to keep and how to keep it) for maximum benefit.

If you want to create a company and grow that company then I would advocate an MBA and Project Management.  Understanding how to manage multiple projects is going to be key to building your business, and an MBA is an obvious choice also.  

Google permits <your city> and to find a general information page/permit center.  The usual things that require a permit that would require a licensed professional are electrical and plumbing.  Lots of other places require a permit for things like foundation, fences,  and irrigation but don't necessarily require a license.  I have also seen some City's allow the homeowner to pull an their own electrical permit if they are doing work on their homestead (they wont allow you to do that on an investment property) and even some that require the homeowner to take and pass a test to ensure they have the requisite knowledge to do the work.  

The only way to know for sure is to take a look at your City's permit webpage and even go down to the permit application office(s) and ask.  

Obviously there are also items that don't require a permit like flooring, paint, and general repair work (i.e. you can repair a water leak in a pipe without a permit).  But again, it's pretty location specific.

This is a VERY market dependent question.  Not only that, but it also depends on the sub market and asset class.  

The vacancy average just from one sub market to the next can be anywhere from 5%-10%.  So i'd be very cautious about using any vacancy number that doesn't come from someone very familiar with your market, sub market, and asset class. 

If it's a long term hold then sub metering is going to best the best way.  The upfront cost can be significant (as you've found) but also does technically increase the value of the building (using the income valuation approach).  

Depending on the age of the building be careful about any work being done on the panel.  Some City's will come in and require that you bring the entire building up to code.  Higher chance of that with a multi-unit property versus a single family.  Depending on what year of the NEC the City follows it could mean full AFCI/GFCI and tamper resistant outlets.  A massive cost that basically requires either a full rewire of the building or potentially extensive troubleshooting.  

There are a number of companies that will go read meters and bill the tenants for you.  So while the account needs to be in your name these companies will basically do the billback for you.  And with sub meters you can bill back 100% of the cost (whereas for water and electricity most places only allow a certain percentage if its not sub metered).  

I think if you calculated your numbers based on a cash on cash return it might surprise you, plus would give you more cash flow so ideally helping you to qualify for larger loans on subsequent investments.  

If you used a 20% return method based on $200/mo then you would be looking at being able to spend $12k or 3k a unit.  I don't know how pricing looks in your area, but $3k a unit would come very close to getting it done for the furnaces but not the water heaters.