All Forum Posts by: Frank Mancuso

Quote from @Jason Bott:

@Frank Mancuso that would be the preferred set up, and the one we recommend to our clients.  

The main reasons for not having a single policy is it made financial sense to split up the portfolio into separate polices for coverage or pricing reasons.  

Example - Say you had 8 sfr, a commercial strip mall and a 12 unit building.  Fitting all of them onto a single policy would be difficult without sacrificing competitive pricing.  Each of those 3 properties have different companies who have the most competitive underwriting with those buildings.

That’s what surprised me, that he is suggesting to put into one policy stating it would make most financial sense - maybe because they are all the same asset class (SFR). 

I had an experienced insurance agent say I could put all properties under a single BPO that are across states (some owned by LLCs and some not). 

Has anyone done this or familiar?  

I originally requested 1 policy per "business" (either LLC or sole proprietorship) and was surprised when he came back and said I could add everything under one policy and add the other LLCs as "named insureds"

Looking for best practice and real life experience. 

Hi Everyone - 

Forgive me if this has been posted before - I've seen bits and pieces but not exactly what I'm looking for.  I have 2 different Property Managers (different states) and I self manage some units, I have 2 LLCs and also a few rentals not in LLCs.  Does anyone know of a way I can pull transactions from propertyware or rentmanager into a csv/excel file for bookkeeping?  

I know things like mint, stessa, cozy help with some of this but their integrations are limited.  

If there is no easy button - has anyone worked with these vendors on their APIs

Originally posted by @Jenelle H.:

Following this thread. I am very curious about how your cash out refi goes, as that’s the thing that makes me nervous about purchasing in the Detroit area. Please do update on how that goes. 

I'm curious about this as well and the breakdown of costs.  

For the refi - how will you go about this and would it be a personal loan or commercial (title in LLC?), terms, etc.

Nice work - it looks great!  

That totally makes sense to get to a more precise estimate.  I have something that can help me with that, too.  

Thanks, guys - these are all awesome points and I appreciate the feedback. A few things and maybe I can tweak it even more.

Capex - I figured a reserve of about $200/month on a go forward basis and entered it in the rental calculator as a % (that's the only option). That said, I did reserve $10k for estimate repair costs since I imagine it will need something. Maybe I can up that to be a bit more conservative given the property is older (76 years old)

I was primarily looking at CoC ROI but know that many commercial properties focus on cap rate. Is there a rule of thumb here that I'm missing?

All the extra data you provided is excellent food for thought. Rents are average in the C neighborhood, expenses are probably lower but I anticipate/estimated them to be higher given the age, and it is nonconforming but legal (I checked that there is an approved variance from 1988). As for the seller, he is elderly and selling all of his properties.

Also, the 11% management fee is conservative.  The guy I use now charges 7% but I wanted to account for his finder fees which are a FULL months rent.  Oh, and the the vacancy, capex and mgmt fee are part of the 2049 expenses.

As for the remaining items, I'll chew on them a bit.  

I've been looking for a multi-family unit to add to my portfolio and my property manager called me with a deal that fell through and the current owner wants to unload it.  

Details:

5 units - Large home that was converted to 5 units a long time ago, all separate utilities

Location: Philly (Not a very desirable neighborhood)

Purchase price - $160k (but I may be able to get it lower)

Monthly Rents - $2595, no vacancies no section 8

Monthly Expenses - $2049, estimated vacancies of 10%, 6% repairs, 7.5% ($200/month) capex, 11% mgmt fees and using the actual tax and estimated insurance numbers

I also estimated $4k for closing costs and $10k in repairs (no major repairs on needed, this is just a cushion because I imagine there is something)

======================

CoC ROI = 14.2% / $545 monthly cash flow

Pro Forma Cap Rate = 9.47%

======================

My concerns/questions:

- Am I analyzing this right?  And how good are these numbers?  Better said, how often to people see these numbers in major cities currently?  

- My property manager has managed this property for years and says it performs well.  The neighborhood isn't desirable but he gets the rents.  

- Being a 5 unit building, how worried should I be about resale being that it's commercial?  Same with the fact that it's a conversion?

- How picky are you about a building that was converted?  This is very common in this neighborhood given the size of the houses back in the day.  

All insights appreciated!  

Keep in mind local rules apply. For example, we once were contemplating moving to an LLC but the transfer tax was 4.5% of the market value of the property. Instead, we opted for a umbrella policy on our insurance policy. It's not exactly the same but another approach.

Welcome Brian! This site is full of great info.

Hi Mark - if available please send me more info. I'll connect with you for contact info.